Jul 12, 2022 - Economy

How Twitter vs. Musk will end

Data: Axios research; Chart: Erin Davis/Axios Visuals
Data: Axios research; Chart: Erin Davis/Axios Visuals

In the matter of Twitter vs. Elon Musk, there can be no winners — but the magnitude of losses involved, especially for Musk, ranges wildly depending on the outcome.

Why it matters: If Twitter wins in Delaware court and forces Musk to buy the company for the agreed-upon $44 billion — a remedy known as specific performance — that would force the billionaire to liquidate a lot of stock he really doesn't want to sell, in order to buy a company he's soured on at a vastly overinflated price.

  • If Musk wins, however, or if he's allowed to walk away while paying no more than a $1 billion termination fee, then it's Twitter that will have suffered most from Musk's acquisition whimsy.

The big picture: The gap between the possible outcomes is so enormous that there's a strong incentive for both sides to come to one of two kinds of out-of-court settlement.

  1. A cash settlement would see Musk pay significantly more than $1 billion in order to be released from his obligation to buy Twitter.
  2. A repricing would see Musk buy Twitter, but at a discount to the current $54.20 per share deal price.

It's largely up to Musk which way to go, depending on the degree to which he still thinks owning Twitter could be fun or profitable.

The bottom line: None of these outcomes seems particularly likely or palatable right now. But this saga has to end with one of them.

Go deeper: A timeline of the Musk-Twitter deal so far

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