Elon Musk Cancels Twitter Deal and May Be Sued for It

According to Twitter’s Chairman, the platform intends to pursue legal action to enforce the merger agreement.

Elon Musk Cancels Twitter Deal and May Be Sued for It

According to Twitter’s Chairman, the platform intends to pursue legal action to enforce the merger agreement.

In an amendment to his Schedule 13D filing, Elon Musk terminated his agreement to purchase Twitter. Following the filing, Twitter’s Chairman tweeted that the platform would be pursuing legal action in order to see that the deal is completed.

According to a report from The Verge, Twitter has hired Wachtell, Lipton, Rosen & Katz to provide its legal needs. Its founding partner, Martin Lipton, is credited with inventing the “shareholder rights plan” or “poison pill” defense that was initially used by Twitter to shutter Musk’s first attempt at a buyout.

With Musk backing out of the deal, there are a few financial penalties at play. The first of which would see Musk pay a termination fee of roughly $1 billion USD. This sum was agreed upon at the commencement of the merger — however, it was meant to be in place in the event Musk could not come up with the $44 billion USD or if events outside of his control stifled the deal.

While it would seem that Musk could just pay the $1 billion USD fee and walk away, that is likely not the case. As Axios Chief financial correspondent Felix Salmon points out in a tweet, the fee would only cover “monetary damages.”

This would mean that Musk will probably end up entering into settlement negotiations with Twitter’s board — likely costing him well over $1 billion USD.

In other news, Web3 has lost over $2 billion USD to hacks this year, according to a new report.

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