Twitter’s CEO had to answer questions from lawyers for Elon Musk who abruptly withdrew his offer to acquire the platform for $44 billion.
It’s a saga with many twists and turns.
The legal battle between Elon Musk, the richest man in the world, and the social network Twitter (TWTR) – Get Twitter Inc. Report continues to hold surprises.
Musk made an offer to acquire the platform for $44 billion on April 25, three weeks after revealing he had become the top shareholder with a 9.1% stake. After being reluctant to this unsolicited offer, Twitter had finally accepted the bid of the CEO of Tesla (TSLA) – Get Tesla Inc. Report which was based on a price per share of $54.20.
Musk had also promised to take Twitter private and to solve the problem of spam bots, or fake accounts, that undermine many social networks.
But on July 8, after new public fights and a slump in the financial markets, the tech tycoon abruptly withdrew his offer, saying Twitter had lied about the number of fake accounts on the platform, which he said constituted a material breach of the agreement.
Twitter responded by filing a lawsuit in the Delaware Chancery Court asking it to compel Musk to honor his original pledge.
A five-day trial is scheduled for Oct. 17 unless there is an agreement by then between the two parties. Here is a guide to this unconventional battle.
Pre-trial depositions started a few days ago with Jack Dorsey, former Twitter CEO who also happens to be a friend of Musk. These depositions are private.
The current CEO of Twitter, Parag Agrawal, was to be questioned by Musk’s lawyers in San Francisco on Sept. 26.
But Agrawal has asked for the deposition to be rescheduled, TheStreet has learned from sources familiar with the matter. Musk’s camp was informed at the last minute, on Sept. 25.
However, Alex Spiro, Musk’s lawyer from Quinn Emanuel firm in New York, had personally made the trip to California for the deposition. He was still in California as of the time of this writing.
The two sides have yet to agree on a new date for Agrawal’s deposition, said the sources, who spoke on condition of anonymity to discuss this part of the court battle which is supposed to take place behind closed doors.
What is certain is that Agrawal must answer questions from Musk’s lawyers before the start of the trial.
Spiro and Twitter declined to comment.
No Settlement Talks
TheStreet also learned that there had been an error on the billionaire’s deposition date. The court filings suggested that Musk would be questioned on Sept. 26 and 27 by Twitter attorneys and that the deposition, which was to take place at a law office in Wilmington, Del., could be extended until Sept. 28.
But according to two sources familiar with the matter, Sept. 26 was just a hold date, nothing definitive.
Musk will be interviewed this week, however, one of the sources said. Probably not on Sept. 27 because Chancellor Kathaleen McCormick has scheduled a hearing that day on several points of friction between the two sides.
Elevate Your Portfolio
Get actionable market insights from a team of experts who actually invest, trade, and manage money for a living
Daily Market CommentaryActionable Trading IdeasInvestment Advice
Rumors about the rescheduling of these depositions momentarily caused Twitter shares to jump by more than 3% on the stock market on Sept. 26. Investors saw it as the start of negotiations on a possible settlement between the two parties.
But according to sources familiar with the matter, there are currently no negotiations underway.
These depositions have high stakes as we recently wrote.
Musk’s lawyers are keen to prove that Twitter is hiding information about the true number of its users. Twitter lawyers seek to demonstrate that Musk abandoned the pursuit of the platform because of the fall in financial markets.
Given Twitter’s current stock price – $41.52 – Musk, whose offer was $54.20 a share, would thus pay too high a price.