Elon Musk Subpoenas Twitter Co-Founder Jack Dorsey to Testify in Trial Over Aborted Acquisition
After initially agreeing to buy Twitter for $44 billion in April, Musk later backed out of the acquisition over allegations that Twitter had underrepresented the number of fake bot accounts on the platform.
Twitter’s (NYSE: TWTR) Board of Directors responded to Musk’s about-face by suing him. Believing they have a legally enforceable contract, the Board is seeking to force Musk to buy out the company. So confident is the Board that they requested and received an expedited trial.
It appears that Twitter has an excellent case. Musk’s primary motivation for abandoning the deal should have been taken into account before signing the agreement; Twitter repeatedly pointed out the fake account issue in their SEC filings. Only after the deal was agreed to did Musk begin to accuse Twitter of misrepresenting the situation.
The latest move from Musk and his lawyers was to subpoena Jack Dorsey, the co-founder and former two-time CEO of Twitter. They apparently believe Dorsey has inside information on the bot issue, as they have subpoenaed any documents he has related to the merger, Twitter’s daily user count and the fake account issue.
Also Read: Elon Musk Flip-Flops on Twitter Deal, Agrees to Move Forward With TWTR Buyout?
Whether Dorsey has the information that Musk is seeking is not yet known, but if he has it, he’ll likely be more than willing to share it with the court. He’s previously expressed his support for Musk acquiring Twitter, tweeting that Musk is the “singular solution” for Twitter being treated as a “public good” instead of a for-profit company.
The trial is set to start on October 24th, and its outcome will significantly impact Twitter investors; the agreed-upon price presents a significant premium over the price pre-deal. If Musk does not end up acquiring the company, the stock price will fall precipitously. If he ends up taking over, shareholders should be rewarded. We’ll find out one way or another by the end of the year.
Shares of Twitter last traded at $40.79 per share, up 2.33% on the day. YTD TWTR stock is down 4.38%.
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