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Twitter shareholders voted to approve Elon Musk’s purchase of the company, weeks ahead of a lawsuit over Musk’s bid to leave the merger agreement. While no specific vote was available today, multiple news reports said investors supported the Twitter board’s recommendation to approve the $44 billion deal Musk agreed to in April before changing his mind.
“A majority of Twitter shareholders voted to accept Musk’s offer of $54.20 a share to acquire the social networking company, according to a preliminary count read Tuesday,” Bloomberg wrote.
Today’s shareholder vote was the last remaining approval Twitter needed for the Musk deal, but the bigger question is what will happen during the upcoming Delaware Court of Chancery trial. Twitter sued Musk to force him to close the deal, and a trial will begin on October 17.
Musk owns about 9.2 percent of Twitter’s stock and was not expected to vote “since he claimed Twitter violated the merger agreement,” The Wall Street Journal wrote. “The deal requires Mr. Musk to vote his shares in favor of the deal, although his support is not crucial if enough other investors back it.”
Twitter shares rose 0.7 percent today, despite a major decline in the overall market. Twitter stood at $41.70 at closing and shareholders would receive $54.20 per share if Musk is to complete the purchase.
Today’s shareholders’ meeting “lasted 7 minutes, with polling stations open about 3 minutes,” according to the Bloomberg article. Shareholders could also vote a few weeks before the meeting. News reports for today’s meeting indicated that there were already enough votes to approve the merger.
Judge criticized Musk before trial
Musk has tried to end the merger by claiming that Twitter lied about the number of spam bots on its service. Musk has repeatedly complained about the total number of bots on Twitter, but has not disproved Twitter’s specific estimate that less than 5 percent of its revenue-generating daily active users (mDAU) are spam or fake.
Musk lost some key statements in the pre-trial phase. His attempt to postpone the trial until February 2023 was rejected in July. Last week, Judge Kathaleen McCormick rejected Musk’s newer motion for a four-week postponement, writing in her ruling that “even a four-week delay would risk further damage to Twitter that is too great to justify.”
McCormick also criticized Musk last week for not providing documents requested by Twitter, writing that “Musk’s own production of text messages revealed glaring shortcomings.” She instructed Musk to produce more documents, noting that Twitter was “born”.[e] most of the discovery burden” while “defendants had less to do, but still failed to fulfill their obligations.”
A Twitter request made public yesterday said gaps in Musk’s production of text messages “are striking because they correspond exactly to the period during which Musk apparently developed buyer’s remorse and set in motion his plan to escape the merger agreement.”
More Musk texts made public
Clearly, the production of Musk’s document was “incomplete as other parties produced messages to and from Musk during this time that Musk should have produced,” Twitter wrote. That includes lyrics between Musk and Morgan Stanley’s head of the global technology investment bank, Michael Grimes, which were produced by Morgan Stanley.
Those reports show Musk wrote to Grimes on May 8 that he was considering terminating the merger agreement due to the possibility of a “World War III.” About half an hour later, according to Twitter’s new public inquiry, Musk wrote to Grimes: “An extremely basic due diligence item is to understand exactly how Twitter confirms that 95% of their daily active users are both real people and not duplicative. be counted.”
“If that number is more than 50% or lower, which I would guess from my feed, then they have fundamentally misrepresented Twitter’s value to advertisers and investors,” Musk wrote to Grimes. “To be very clear, this deal will move forward if it passes the due diligence, but of course not if there are huge gaping issues.”
According to Twitter’s filing, these posts came weeks after Musk “expressly disavowed any due diligence before signing and agreeing to a no-diligence merger.”
