Buying Twitter “is an accelerant to creating X, the everything app”, said Elon Musk, by way of non-explanation of why he is now prepared to do the deal he was desperately trying to escape. One must conclude he judged his legal case to be doomed before it had even reached a Delaware courtroom.
That assumes, of course, that the latest plot-twist is not another wheeze to play for time. Twitter’s board sensibly signalled that it wants to nail down every detail of Musk’s latest offer to proceed on April’s agreed $44bn terms. Quite right: don’t leave an inch of wriggle room.
But, if this is the end of the saga, the right side has won the dispute. Musk’s bleats about fake bots may or may not have had substance, but they became irrelevant once he committed to pay $54.20 a share for Twitter. At that point, it was up to him to prove that a “material adverse change” had occurred – a test where courts have rightly applied a high hurdle in the past. Few legal experts could see how the claim could possibly stack up.
Given what’s happened to tech and social media companies’ valuations since April, Musk is probably paying at least twice what a standalone Twitter is worth. That’s life. Deals are struck at a moment in time. The same applies to the banks who provided financing for the adventure and may now struggle to off-load the debt on to other investors at April’s prices. Nobody forced them to volunteer.
Twitter’s board deserves credit for sticking to its guns. It was given the runaround by Musk in the early weeks, but now looks set to deliver the result it promised its shareholders. In the process, it has defended the excellent principle that bidders should do what they’ve agreed to do. Whether Musk will be a good owner of Twitter is an entirely different matter. But the next billionaire with a bad case of buyer’s remorse will find it harder to flee; that is definitely welcome.
