Twitter Inc TWTR Shares traded higher on Wednesday after a court ruled against it Elon Muskto postpone the trial in the social media platform’s lawsuit against the Tesla Inc TSLA CHAIRMAN.
What happened? Twitter is suing Musk over Musk’s attempts to abandon a deal to acquire Twitter for $44 billion. On Wednesday, Chancellor Catherine McCormick dismissed Musk’s attempt to delay the trial, but ruled he will be allowed to add claims from a Twitter whistleblower to his counterclaim against Twitter.
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Why it matters: Musk’s legal team had requested that the start of the trial be pushed back from Oct. 17 to mid-November, but McCormick said a delay would create a risk for Twitter that “is too great to justify.”
Since Twitter accepted Musk’s takeover bid in April, the social media platform’s market cap has fallen to around $30.6 billion, well below Musk’s $44 billion bid.
Musk initially said he wanted to go out of business because Twitter didn’t provide accurate information about the percentage of its monetizable users who are actually spam accounts. Musk’s legal team also argues that a recent whistleblower complaint from Twitter’s former security chief Peter “Mudge” Zatko The allegation of egregious safety deficiencies is evidence that the company violated the terms of the acquisition agreement.
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Twitter and Tesla investors both have a lot to do with the process. The best-case scenario for Twitter investors and potentially worst-case scenario for Tesla investors would be that the court would force Musk to buy Twitter, potentially draining Musk financially and causing him to buy more Tesla stock for sale.
Musk sold about $8.4 billion worth of Tesla stock in April after the Twitter deal was announced, but tweeted that “no further TSLA sales are planned.” Musk then sold another $6.9 billion…
