Is this legal? It seems like such a devious exploit.
1. Announce buyout (priced at a premium, of course) is "on hold"
2. Stock drops due to bad news
3. Re-negotiate for lower buyout after manipulating the stock to a lower price
1. Announce buyout (priced at a premium, of course) is "on hold"
2. Stock drops due to bad news
3. Re-negotiate for lower buyout after manipulating the stock to a lower price
He can only back out is Twitter's securities filings are so wrong that profit projections are more than 40% off (MAE standard) or he was unable to secure financing. Spambots being a bit higher than projected is not enough to break the contract, especially given that Musk waived due diligence and that the Twitter filings have always said that the bot number is an estimate. Elon Musk's lawyers are probably more than a bit panicked right now.
If everything is on fire, all day, every day, then nothing is on fire.
1. Accept the 1bn backout and accept that Musk will look like a fool.
2. Sell enough Tesla stock to finance the deal, while risking a total meltdown of the Tesla stock price.
The lawyers are most likely trying to devise a third option, but it's very hard to see how that can play out.