Elon Musk has said he is “rubber” while Twitter is “sticky”, in what appears to be a dismissive response to the social media company’s statement about him in its quarterly earnings announcement.
Twitter’s revenue fell 1 percent in its second quarter, “reflecting the advertising industry’s macro-environmental difficulties as well as uncertainty surrounding the pending acquisition of Twitter by an affiliate of Elon Musk,” the company said. .
Subscriptions and other income came in at $101m (£84m), down 27 per cent year-on-year, while net loss was $270m (£225m), representing a net margin of minus 23 per cent.
“Given the pending acquisition of Twitter by an affiliate of Elon Musk, we will not host an earnings conference call, issue a shareholder letter or provide financial guidance in connection with our earnings release. second quarter 2022,” Twitter said.
Regarding the acquisition itself, Twitter said that “representatives of Musk sent a notice purporting to terminate the merger agreement. Twitter believes that Musk’s purported termination is invalid and erroneous and the merger agreement remains in effect.” The company has begun a lawsuit against Musk, and an expedited trial was granted earlier this week, scheduled for October 2022.
“The exact timing of the completion of the merger, if at all, cannot be predicted because the merger is subject to ongoing litigation, the approval of the merger agreement by our stockholders and the satisfaction of the remaining closing conditions,” he said.
In response to Twitter that “blamed” Musk for his falling income, Musk replied: “I’m rubber, they’re glue.” This appears to have been a reference to a playground replication that dismisses an accusation and applies it instead of the party making it.
The saga behind Mr Musk’s acquisition of Twitter began when Musk bought 9.2 per cent of the company, worth almost $3bn (£2.3bn), on April 4, 2022.
The next day, Musk said he would join the company’s board. After six days, Musk reversed his decision, before making an offer to buy the entire company on April 14.
However, in May, Musk began raising questions about the number of bot accounts on the platform — despite stating in an April press release that he was buying Twitter to deal with spambots.
Twitter filed to sue Musk last week, arguing that the tech billionaire is legally bound to complete the $44 billion acquisition of the social network.
Twitter argued that walking away from the deal now would be “void and wrong” and said Musk “apparently believes that he — unlike any other party subject to Delaware contract law — is free to change mind, break up the company, shut down its operations, destroy shareholder value and get out.”
Musk has claimed that his reason for walking away from the deal is that Twitter did not provide him with information about fake accounts and spambots on the platform.
“Twitter has failed or refused to provide this information. “At times Twitter has ignored Mr. Musk’s requests, at times it has refused them for reasons that appear unjustified, and at times it has pretended to comply by providing Mr. Musk with incomplete or unusable information,” Musk’s lawyer said in a statement. letter to Twitter’s board.
Twitter then filed in the Delaware Court of Chancery. Musk responded to the news by tweeting: “Oh the irony lol.”
It’s unclear who will emerge victorious in this case, but if Musk loses it seems unlikely that he will be able to simply walk away from the deal without paying a penalty.
If Musk refuses to buy Twitter despite being ordered by a judge, he could be held “in contempt and fined a day until he complies,” said Brian Quinn, a Boston College law professor who teaches law. in connection with mergers and acquisitions. , told Bloomberg. “For Musk, that would have to be a pretty big number.”
Tesla, which is owned by Mr. Musk, is also a Delaware corporation, which would give the court the power to go after Mr. Musk’s stock options. However, such a scenario is unprecedented.
