Like Elon Musk’s imbroglio with Twitter moves from the meeting room to the courtroomone would expect that, under the watchful eye of the Delaware Court of Chancery, things would take a more predictable trajectory than they have thus far.
In theory, the court case that the social media platform launched on Tuesday to force Musk to follow through on its acquisition offer presents a limited range of possible outcomes: Musk could be forced to close at the agreed price of $44 billion; pay a $1 billion termination fee to withdraw from the deal; spit out an intermediate price that the court decides; or escape unscathed.
Yet if there’s a lesson to be learned from everything that’s happened so far, it’s that there are no guarantees, even in the face of binding contracts, federal regulations, and precedents. history, when it comes to the richest man in the world. Settlement is still an option – some experts even say it’s likely – and would open up a whole new menu of options. Here are a few.
Musk has never been one to refrain from criticizing Twitter, despite being one of the platform’s biggest users.
He has panoramic its content moderation policies as undemocratic, pushed for major changes to both the company’s product and its business model, and consistently criticized the site’s handling of automated spam bots (the “problem the most boring of Twitter”, he once wrote).
Signing a deal for him to buy the platform hasn’t dulled those beards. In a tweet that Twitter included in his lawsuit, he responded to a remark by chief executive Parag Agrawal with nothing but poo emoji.
“Since signing the merger agreement, Musk has repeatedly disparaged Twitter and the deal, creating business risk for Twitter and downward pressure on its stock price,” the company complained in the folder. This despite a provision of the agreement which required that Musk’s tweets “not disparage the company or any of its representatives”.
It would not be unusual for this type of agreement to be part of a longer-term settlement, said Charles Elson, founding director of the Weinberg Center for Corporate Governance. “You could have a non-disparagement agreement” in those kinds of circumstances, he said. “I wouldn’t be shocked.”
“He wouldn’t denigrate Twitter, they wouldn’t denigrate him,” Elson added. “That would be mutual non-bashing.”
Whether Musk would actually abide by those terms is, of course, an entirely different matter.
Also on the table could be some sort of nondisclosure agreement, or NDA, that would limit what one or both parties could share publicly about the recurring relationship they’ve been engaged in since early April.
“I could definitely see an NDA happen that would keep certain terms confidential and allow a party to ‘save face,'” Alex Bruno, founder of Glendale-based business law firm Bruno Group, said in an email. -mail.
However, Twitter may still have to disclose some information, given that it is publicly traded, Bruno added.
This eventuality could prove particularly attractive to Twitter because, according to the lawsuit, the company gave Musk significant access to corporate intelligence during their dealings, including about 49 tebibytes of raw historical data from the site.
Then again, Musk currently seems bound by some sort of NDA and doesn’t seem concerned about it at all. “Twitter’s legal department just called to complain that they violated their NDA by disclosing that the bot verification sample size is 100!” he wrote in a May tweet, referring to his efforts to replicate Twitter’s bot prevalence estimates.
A non-competition agreement?
A looming threat to Twitter is that if Musk doesn’t end this saga as owner of the platform, he could revert to an idea he’s toyed with in the past: competing with the company on his own terms.
In a tweet in March, he asked what to do with Twitter’s content moderation policies, which he calls undemocratic. In a follow-up, he offered a possible course of action: “Is a new platform needed?”
Later that day he added“I am seriously considering this.”
Now, with the benefit of having seen some of the inner workings of Twitter first hand – and enjoying months of free press on how he would run a social network if he were in charge – Musk just might fall back to this option if not prohibited from doing so.
Although Twitter alternatives have always struggled to enter the mainstream, it’s a threat Twitter doesn’t take lightly. In its lawsuit, the company noted that Musk said he would “do one of three things with Twitter: serve on its board, buy it, or create a competitor” — which he opted out of and the second of which he seems to be actively trying to avoid.
“The biggest generic scenario is that Musk has to pay Twitter a massive $5 billion to $10 billion settlement amount and he’s barred from starting his own social media platform,” he said. Wedbush analyst Dan Ives, a frequent commentator on Musk-Twitter. saga, in an email to The Times. “It would be an end of twilight zone for this circus show.”
Twitter Policy Changes
Musk could even use a settlement as an opportunity to push for some policy changes — from highly politicized ones such as those about how Twitter moderates user speech, to the kind of workhorses that superusers like him stand on. care, including the addition of an “Edit Tweet” button.
Even if such concessions came with a cash settlement that he had to pay, they could offer the public figure a chance to save face.
But that’s an unlikely outcome, Bruno said.
“I don’t see any change in the site’s policies unless Twitter gets a lot of money,” the attorney wrote. However, he added, Twitter can always choose to make changes “to publicly show their users that they are active in taking down bots,” the focus of much of Musk’s criticism.
Elson agreed. “I don’t think he would be able to get them to change business practices. … Ultimately, it is a business transaction; it is [about], ‘How much is this thing worth?’ That’s all.”
But Ives is more open to that possibility.
“If Musk is ultimately forced to take over Twitter by the court,” he said, “there could be agreed content areas as part of a deal.”
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Post expires at 9:47pm on Friday July 22nd, 2022