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CNBC analyst David Faber said that he believes Tesla CEO Elon Musk could go to prison because of his failed deal to acquire Twitter.
Twitter chairman Bret Taylor has vowed to take legal action against Musk as his decision to back out of the deal could damage Twitter’s stock price and value.
“Then the question is: you are forcing Mr. Musk to buy the company, does he actually agree to do it?” the CNBC analyst said.
“There is this argument being said lately that, well, maybe he will not comply with that. Then we would have a situation where they could put him in jail,” he said.
Others on the panel laughed at the idea that Musk could go to prison for not doing the deal but Faber insisted that he could.
“That’s where we could end up,” he said.
— Jilianne (@MissJilianne) July 11, 2022
“A reverse breakup fee paid from a buyer to a target applies when there is an outside reason a deal can’t close, such as regulatory intermediation or third-party financing concerns. A buyer can also walk if there’s fraud, assuming the discovery of incorrect information has a so-called ‘material adverse effect.’ A market dip, like the current sell-off that has caused Twitter to lose more than $9 billion in market cap, wouldn’t count as a valid reason for Musk to cut loose — breakup fee or no breakup fee — according to a senior Mergers and Acquisitions lawyer familiar with the matter,” CNBC reported.
Twitter executives have hired a high-powered legal team after billionaire Elon Musk announced late last week he is pulling out of the $44 billion deal to buy the platform.
According to a report from Bloomberg on Sunday, Twitter has hired Wachtell, Lipton, Rosen & Katz — big names in business merger law — to enforce Musk’s original agreement.
Meanwhile, as The Daily Wire reports:
Musk has hired Quinn Emanuel Urquhart & Sullivan LLP, the same firm that has represented him at least twice before — once in a 2019 defamation case, which he won, and also in a still ongoing suit stemming from his 2018 attempt to make Tesla, Inc. private.
The Tesla CEO informed Twitter via his attorneys on Friday that he was not prepared to go through with the deal as originally stated, saying that even though he had repeatedly asked Twitter to verify how many of the platform’s accounts were fake/”bot” accounts, the social media giant had failed to do so.
“Twitter has failed or refused to provide this information. Sometimes Twitter has ignored Mr. Musk’s requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr. Musk incomplete or unusable information,” a letter from Musk’s team to Twitter said.
“Mr. Musk and his financial advisors at Morgan Stanley have been requesting critical information from Twitter as far back as May 9, 2022—and repeatedly since then—on the relationship between Twitter’s disclosed mDAU figures and the prevalence of false or spam accounts on the platform,” the letter stated further, adding, “Notwithstanding these repeated requests over the past two months, Twitter has still failed to provide much of the data and information responsive to Mr. Musk’s repeated requests.”
In addition, Musk has stated that the information is key to Twitter’s business and financial models and performance which is why he requires it in order to complete the deal.
To that point, Musk responded — on Twitter — to Twitter’s announcement the platform had hired a legal team with a mocking meme showing him in various stages of laughter.
— Elon Musk (@elonmusk) July 11, 2022
“They said I couldn’t buy Twitter. Then they wouldn’t disclose bot info. Now they want to force me to buy Twitter in court. Now they have to disclose bot info in court,” his meme stated.
According to a report from the Associated Press, shortly after Musk sent his letter stating that he was walking away from the deal, Twitter fired back stating they will sue the Tesla and SpaceX founder.
“The chair of Twitter’s board, Bret Taylor, tweeted that the board plans to sue Elon Musk to complete the $44 billion merger he just rejected and that Twitter is ‘confident’ it will prevail,” the outlet tweeted.
Musk’s flirtation with buying Twitter appeared to begin in late March. The possible unraveling of the deal is just the latest twist in a saga between the world’s richest man and one of the most influential social media platforms. https://t.co/TiwE4psu4j
— The Associated Press (@AP) July 8, 2022
The AP added:
The likely unraveling of the acquisition was just the latest twist in a saga between the world’s richest man and one of the most influential social media platforms, and it may portend a titanic legal battle ahead.
Twitter could have pushed for a $1 billion breakup fee that Musk agreed to pay under these circumstances. Instead, it looks ready to fight to complete the purchase, which the company’s board has approved and CEO Parag Agrawal has insisted he wants to consummate.
In a letter to Twitter’s board, Musk lawyer Mike Ringler complained that his client had for nearly two months sought data to judge the prevalence of “fake or spam” accounts on the social media platform.