It’s like selling a house and buyer makes an offer with no contingencies.
Sure, you can sue them to close the deal but the juice isn’t worth the squeeze. Does Twitter want to be locked into some multi-year court battle?
They’ll settle and the news will move onto something else.
Delaware courts are pretty fast. The court case could conceivably be finished before the end of this year.
The real question you should ask yourself is, if $44 billion is on the line, how long would you continue to pursue the case in the face of lawyers who are just trying to drag it out? Even if it went on for years (it's not assured Musk's lawyers could drag it out past a year), I can think of 44 billion reasons to continue with the case.
They won’t get any more buyers while it’s happening and it’s a massive distraction.
I’ve worked at companies like this and it brutal on employee morale. People just leave.
No one is going to buy Twitter at anything close to what Musk offered.
>I’ve worked at companies like this and it brutal on employee morale. People just leave.
You know how much Twitter engineers get paid, right? Twitter offer fully remote positions; no engineer with any sense is going to work at some no-name company for ~$100k if they can get an offer from Twitter, which will be almost twice that at least.
Who cares? If you think you're going to win, it's just Elon causing his future employees to quit. It's not going to affect your payday of $54.20. Similarly, no other buyers will make lower offers. Those are, by definition, worse than just suing.
LOL, I'm sure the juice will be worth the squeeze on a $44 billion dollar house.
Maybe his ego is incompatible with not owning the things he relies on but in this case that ownership comes with a pretty hefty price tag and even people at Musk's level don't throw around tens of billions of dollars lightly (normally speaking, that is).
The price in the deal was set by professional lawyers at Goldman Sachs, so if it was beyond stupid, it was not Elon’s fault.
The deal was proposed before the recession, and at that time there were people proposing that the price is too low, because Twitter stock was over $60 at some point.
Of course in the current market Elon would pay a few billions to get out of the deal, but it’s a different deal than what it has been a few months ago.
So they aim to provide a somewhat lower valuation.
Delaware Court of Chancery loves ordering specific performance on deals.
But the amount of value wobbled sure pushes both sides towards settlement.
But ... each party's willingness and ability to settle varies based on moving market prices and economic conditions.
That really depends on the offer you accepted (A), the current value of the house (B), the cost of litigation (C), and the price you put on your time and mental energy (D). If A > B + C + D, it makes sense to force the buyer to close. And in most cases, you're relying on the buyer to close in order to be able to close on the house you're moving to so you may have no choice.
You imagine how distracting it would be for Twitter to have this in their quarterly updates? They certainly aren’t selling the company until it’s resolved.
My prediction - lots of public tough talk, then a quiet resolution.
Twitter is worth $28b and Musk's offer was $44b - a $16bn delta. The most annual revenue that a single law firm in the US has made is about $4bn.[1]
Any amount Twitter could spend on lawyers is nothing compared to what they stand to make by winning.
If you're accounting for whatever "toll" it takes on the company's leadership and employee morale, $16bn is about 2.75 years of operating expenses. Even if you assume every employee is operating at 50% mental capacity the entire time, it still makes sense to fight as long as it's over in <= 5 years.
1. https://en.wikipedia.org/wiki/List_of_largest_law_firms_by_r...
There's basically no way they could possibly spend even a tiny fraction of the overall deal's worth fighting this even if it went on for years. Not spending that money to fight this would really be stupid.
It’s a profitable venture for twitter