Twitter shareholders voted to approve Elon Musk’s purchase of the company, weeks before a trial over Musk’s attempt to exit the merger deal. While no specific vote count was available today, multiple news reports said investors backed Twitter’s board recommendation to approve the $44 billion deal that Musk agreed to in April before changing his mind.
“A majority of Twitter shareholders voted to accept Musk’s $54.20 per share offer to acquire the social networking company, according to a preliminary vote count read Tuesday,” Bloomberg wrote.
Today’s shareholder vote was the last remaining approval Twitter needed for the Musk deal, but the bigger question is what will happen at the upcoming trial in Delaware court. Twitter is suing Musk to force him to complete the deal, and the trial is set to begin on October 17.
Musk owns about 9.2% of Twitter’s stock and was not expected to vote “given that he claims Twitter violated the merger agreement,” The Wall Street Journal wrote. “The agreement requires Mr. Musk to vote his shares in favor of the deal, although his support is not critical if enough other investors support him.”
Shares of Twitter rose 0.7 percent today despite a big drop in the overall market. Twitter was priced at $41.70 at the close, and shareholders will receive $54.20 per share if Musk were to complete the purchase.
Today’s “shareholder meeting lasted 7 minutes, with polls open for about 3 minutes,” according to the Bloomberg article. “Shareholders can also submit votes several weeks before the meeting.” News reports ahead of today’s meeting indicated that there were already enough votes to approve the merger.
The judge criticized Musk before the trial
Musk tried to back out of the merger, claiming Twitter had lied about the number of spambots on its service. Musk has repeatedly complained about the total number of bots on Twitter, but has not disputed Twitter’s specific estimate, which is that less than 5 percent of its monetizable daily active users (mDAUs) are spam or fake.
Musk lost some key decisions in the pretrial phase. His attempt to delay the trial until February 2023 was rejected in July. Last week, Judge Kathleen McCormick denied Musk’s more recent request for a four-week delay, writing in its ruling that “even a four-week delay would risk further damage to Twitter too great to justify.”
Last week, McCormick also criticized Musk for not providing documents requested by Twitter, writing that “Musk’s own production of text messages reveals glaring flaws.” She ordered Musk to produce more documents, noting that Twitter “was born[e] most of the burden of discovery,” while “Defendants had less to do, but still failed.”
A The Twitter documents were released yesterday said the omissions in Musk’s text message production “are noteworthy because they correspond precisely to the period when Musk apparently developed buyer’s remorse and set in motion his scheme to avoid the merger agreement.”
More Musk texts have become public
Clearly, Musk’s document “was incomplete as other parties produced communications to and from Musk during that time period that Musk should have produced,” Twitter wrote. This includes texts between Musk and Morgan Stanley’s head of global technology investment banking, Michael Grimes, which were produced by Morgan Stanley.
Those reports show that on May 8, Musk wrote to Grimes that he was considering leaving the merger agreement because of the possibility of “World War III.” About half an hour later, according to Twitter’s newly available public filing, Musk wrote to Grimes that “An extremely fundamental element of due diligence is understanding exactly how Twitter verifies that 95% of their daily active users are both real people and not counted double’.
“If that number is more than 50% or less, which is what I would guess based on my feed, then they have fundamentally misrepresented Twitter’s value to advertisers and investors,” Musk wrote to Grimes. “To be super clear, this deal moves forward if it passes due diligence, but obviously not if there are huge, gaping problems.”
Twitter’s filing said those announcements came weeks after Musk “expressly waived any care before signing and agreeing to a merger without verification.”