July 9, 2022
As we had suggested might happen in our Post back on June 6, 2022, Elon Musk officially “terminated” his offer to buy TWTR today. Not sure he did it with a letter to the Company, or via a Tweet.
Of course, there are two parties to this contract, and it appears that TWTR directors are going to demand that Musk either completes the purchase of TWTR for $54.20 per share, or pay the $1 Billion Dollar “break up” fee, that was included in the deal. Our thought has always been, that Musk will probably try to tie up that payment obligation in endless litigation, and that eventually a lower cost fee will be arrived at.
However, the State of Delaware has pretty strict business laws and a contract is a contract, so using legal tactics might not work as well as Musk might hope. Hedge Funds and speculators who bought TWTR stock on the belief that Elon Musk was serious about taking TWTR private at an inflated price are probably not too happy at this moment.
Wonder if the SEC will want to look into any potential insider trading as this deal got put together, and then fell apart?
One thing that might be of interest to a few members of Congress in reviewing the deal is the ability of super rich folks, like Elon Musk, to borrow money, using their stock as collateral, rather than having to sell and incur a tax. A great tax loophole for major stockholders.