Ahead of a trial over Musk's attempt to exit the merger deal, shareholders voted to approve his purchase of the company. Multiple news reports said investors supported the board's recommendation to approve the deal before Musk changed his mind.
According to a preliminary vote count read on Tuesday, a majority of shareholders voted to accept Musk's $54.20-a-share offer to acquire the social-networking company.
The bigger question is what will happen at the upcoming trial at Delaware Court of Chancery after today's shareholder vote. A trial is scheduled for October 17th, when a lawsuit is expected to be brought against Musk.
The Wall Street Journal reported that Musk wasn't expected to vote because he had alleged that the merger wasn't in the best interests of the company. If enough other investors back the deal, Mr. Musk's support isn't important.
Despite a big drop in the market, the stock of the social media company was up 0.7 percent. If Musk completes the purchase, shareholders will get $54.20 per share.
The meeting lasted 7 minutes and the polls opened for 3 minutes, according to the article. The shareholders could vote several weeks before the meeting. There were enough votes to approve the merger, according to news reports.
Musk tried to leave the merger by saying that there was a lie about the number of fake accounts on the service. Musk hasn't disproven the estimate that less than 5 percent of its daily active users are fake, but he has complained about the overall number of bot on the site.
Key rulings were lost in the pre- trial phase. He tried to delay the trial until February 23, 2023. The judge ruled last week that even a four-week delay would risk further harm to the social networking site.
AdvertisementMusk's own production of text messages revealed glaring deficiencies and he was criticized last week. She ordered Musk to produce more documents and noted that defendants had less to do but still fell short.
The gaps in Musk's production of text messages correspond to the period when Musk apparently developed buyer's remorse and set into action his plan to escape the merger agreement.
Other parties have produced messages to and from Musk during this time period that Musk should have produced. There are texts between Musk and the head of global technology investment banking at Morgan Stanley.
The messages show that Musk wrote to Grimes on May 8 about the possibility of World War III. According to the public filing, Musk wrote to Grimes that "an extremely fundamental due diligence item is understanding exactly how the majority of their daily active users are real people and not double-counted."
"If that number is more than 50% or less, which is what I would guess based on my feed, then they have been misrepresenting the value of the service to advertisers and investors," Musk wrote. If the deal passes due diligence, it will move forward, but not if there are massive gaping issues.
The messages came weeks after Musk said he would not sign and agree to a merger.
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