Like Elon Musk’s mess with Twitter it moves from the boardroom to the courtroomone would hope that, under the watchful eye of the Delaware Court of Chancery, things would take a more predictable trajectory than they have so far.
In theory, the lawsuit that the social media platform launched Tuesday to force Musk to follow through on its takeover offer presents a limited spectrum of possible outcomes: Musk could be forced to close at the agreed-upon price of $44 billion; pay a $1 billion termination fee to exit the deal; any intermediary price decided by the court; or escape entirely unscathed.
But if there’s one lesson to be learned from everything that’s transpired so far, it’s that there are no guarantees, even in the face of binding contracts, federal regulations and historical precedent, when it comes to the world’s richest man. Settlement remains an option (some experts even say it’s likely) and would open up a new menu of options. Here are some of them.
Musk has never been able to suppress criticism of Twitter, despite being among the biggest users of the platform.
he has panorama its content moderation policies as undemocratic, pushed for major changes to both the company’s product and business model, and persistently criticized the site’s handling of automated spam bots (Twitter’s “single most annoying problem” , he once said. he wrote).
Signing a deal for him to buy the platform didn’t dampen those barbs. In a tweet that Twitter included in its lawsuit, it responded to a comment from CEO Parag Agrawal with nothing more than the “poop” emoji..
“Since signing the merger agreement, Musk has repeatedly belittled Twitter and the deal, creating business risks for Twitter and downward pressure on its stock price,” the company complained in the filing. This despite a provision in the agreement requiring that Musk’s tweets “not disparage the Company or any of its representatives.”
It wouldn’t be unusual for that kind of deal to be part of a long-term deal, said Charles Elson, founding director of the Weinberg Center for Corporate Governance. “You could have a non-disparagement agreement” in these kinds of circumstances, he said. “I wouldn’t be surprised.”
“I wouldn’t look down on Twitter, they wouldn’t look down on it,” Elson added. “It would be mutual non-contempt.”
Whether Musk would actually meet those terms is, of course, an entirely different matter.
Some sort of nondisclosure agreement, or NDA, could also be on the table that would limit what one or both parties could share publicly about the on-again, off-again relationship they’ve been in since early April.
“I could definitely see an NDA happening that would keep certain terms confidential and allow one party to ‘save face,'” Alex Bruno, founder of the Glendale-based corporate law firm Bruno Group, said in an email.
However, Twitter may have to disclose some information, given that it is publicly traded, Bruno added.
This eventuality could be particularly attractive to Twitter because, according to the lawsuit, the company gave Musk significant access to corporate intelligence during their negotiations, including about 49 terabytes of raw historical data from the site.
On the other hand, Musk seems to be currently bound by some kind of NDA and doesn’t seem too worried about it. “Legal Twitter just called to complain that I violated their NDA by disclosing that the bot’s verification sample size is 100!” hello he wrote in a tweet in May, referencing its efforts to replicate Twitter’s bot prevalence estimates.
A non-compete agreement?
One looming threat for Twitter is that if Musk doesn’t end this saga as the platform’s owner, he may revisit an idea he’s toyed with in the past: compete with the company on its own terms.
In a tweet this March, hey he asked what should be done about Twitter’s content moderation policies, which he framed as undemocratic. In a follow-up, he presented a possible course of action: “Is a new platform necessary?”
Later that day he added“I’m seriously thinking about this.”
Now, with the benefit of having seen some of Twitter’s inner workings firsthand, and enjoying months of free press about how he would run a social network if he were in charge, Musk may well return to that option if he is not prevented from doing so.
While Twitter alternatives have historically struggled to break into the mainstream, this is a threat Twitter is not taking lightly. In its lawsuit, the company noted that Musk said he “will do one of three things with Twitter: sit on its board of directors, buy it, or create a competitor,” the first of which was ruled out and the second. it looks like he’s actively trying to avoid it.
“The biggest wildcard scenario is that Musk needs to pay Twitter a massive settlement number between $5 billion and $10 billion and is restricted from starting his own social media platform,” said Wedbush analyst Dan Ives, a frequent commentator on Musk-Twitter. saga, in an email to The Times. “That would be a twilight zone that would end this circus show.”
Twitter policy changes
Musk could even use a deal as an opportunity to push for certain policy changes, from highly politicized ones like those surrounding the way Twitter moderates user speech to the kind of ponies that superusers like him care about, including the addition of an “Edit Tweet” Button.
Even if such concessions were accompanied by a cash settlement he had to pay, they could offer the public figure a chance to save face.
But it’s an unlikely outcome, Bruno said.
“I don’t see a change in the site’s policies unless Twitter gets a lot of money,” the lawyer wrote. However, he added, Twitter may still choose to make changes “to publicly show their users that they are active in removing bots,” the focus of much of Musk’s criticism.
Elson agreed. “I don’t think I’m going to be able to get a change in their business practices. … Ultimately, this is a business transaction; it is [about], ‘How much is this thing worth?’ That’s all.”
But Ives is more open to the possibility.
“If Musk is eventually forced to take ownership of Twitter by the court,” he said, “there may be some areas of content agreed upon as part of a settlement.”