There is a lot of work to be done before the deal is finalized — and Twitter will undoubtedly want the judge in Delaware to ensure everything is airtight before the court case is wound up.
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Elon Musk's sudden change of heart has been described as an embarrassing U-turn in some legal circles — an admission that his case against Twitter wasn't going well.
Eric Talley, a professor at Columbia Law School, told the Financial Times that this will be a "big pill to swallow for Musk."
Tesla's CEO was determined to fight the social network and wriggle out of the $44 billion takeover he proposed earlier this year.
This was never going to be easy. Musk had waived his right to perform detailed due diligence when he inked the deal — meaning he would have been on the hook for a $1 billion termination fee.
His only option for exiting the takeover without paying a cent would have been to prove that Twitter had suffered a "material adverse effect" — and that the tech giant had been inaccurate when describing how many fake accounts were on its platform.
Reading between the lines, it seems that Musk didn't fancy his chances of proving this at the Delaware Court of Chancery later this month. Many legal experts had argued that concerns over bots wouldn't have been enough to terminate the deal anyway — not least because Musk had previously said this was one of his main motivations for buying the company to begin with.
A more pressing factor may have been the fact that Musk was set to undergo a deposition on Thursday and Friday — amid speculation that damaging revelations could come to light.
But now, questions remain on whether the billionaire actually intends to go through with the Twitter deal — or whether this is yet another stalling tactic. Musk's legal team had initially requested that this trial begin in 2023, but a judge said no.
There is still a lot of work to be done before the deal is finalized — and Twitter will undoubtedly want the judge in Delaware to ensure everything is airtight before the court case is wound up.
And concerns will once again emerge over whether Musk is spreading himself too thin — especially considering he's also the CEO of Tesla and SpaceX.
It's no coincidence that Tesla's share price fell sharply when news of the Twitter deal emerged on Tuesday — and investors in the electric vehicle manufacturer are undoubtedly worried about whether this acquisition will end up being an unwelcome distraction for the company's leader.
