After months of trying to get out of the deal, Musk now says he will complete it. Musk said in the letter that he would honor his deal to buy the company for the original price of $54.20 per share. The deal was supposed to be closed today.
Legal experts were not surprised by the U-turn by Musk, who had suggested in public statements that he could easily walk away from the deal.
Robert Miller is the chair of corporate finance and law at the University of Iowa College of Law. For this argument to have worked, the company would have to have committed a huge amount of fraud, for which no evidence has emerged.
In May, Musk said that his acquisition of the social network was on hold because it had downplayed the number of fake accounts. In an August legal filing, Musk claimed that there were more fake accounts on the platform than the company had said. In September, after Peiter "Mudge" Zatko testified in front of the US Senate, Musk added those allegations to his own suit.
Musk had a high legal bar to clear because of the accusation. Miller says that it's difficult to prove a fraud allegation because you need to show that Musk was lied to.
The material that came to light ahead of the trial did not support the argument. Miller says, "He knows that his best claim is fraud, but they've got the evidence fromTwitter, and there's nothing that looks like fraud here." They ran out of cards.
It is possible that Musk's decision to fold was influenced by the trial that could damage him. The internet chewed over a lot of his text messages with people in Silicon Valley. He faced a very embarrassing deposition this week.
It seemed like Musk would end up owning the company if he pressed on in court. That could have jeopardized his relationship with co-investors who had taken some financial pressure off theentrepreneur by agreeing to help finance his acquisition deal. If this continued, Musk risked buying a company that was worse off than when he began, but doing it with less equity support.
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