May 19, 2022
Legal experts warn that it will be difficult for Elon Musk to prove he was misled by the social media platform Twitter.
Elon Musk has announced he will suspend his $44 billion takeover of Twitter until the company provides evidence to back up its claim that spam accounts account for less than 5% of its users.
According to legal experts, Twitter has indicated in its regulatory filings that the bots’ estimates may not accurately reflect the actual number of spam accounts. This gives Twitter protection against potential lawsuits.
Another hurdle making it difficult for Elon Musk to prove he was deceived will be his failure to do due diligence in negotiating the Twitter deal.
“It would be difficult to establish the basis for either an SEC enforcement case or shareholders action unless it could be shown that Twitter deliberately or recklessly disregarded information that would show that its spam estimates were misleading,” said Howard Fischer, a partner at law firm Moses & Singer.
Now all Elon Musk has to do is either negotiate and close the deal or pay the $1 billion break-up fee if he is no longer interested in closing the deal.
The sources for this piece include an article in Reuters.
