During a short online conference cast on Tuesday, Twitter shareholders approved Tesla CEO Elon Musk’s $44 billion deal to buy the company.
The decision was made at the company’s San Francisco headquarters and effectively left the deal’s outcome up to a looming court battle. The court case pertains to the world’s richest man’s purchase of the social media giant.
Shareholders’ decisions followed explosive testimony by Peiter Zatko, Twitter’s former head of security, in front of the US Senate. It was implied that Twitter would attempt to force Elon Musk to buy the company in court.
Twitter agreed to sell the company to Elon Musk in April. However, the deal soured after the world’s richest man alleged he was misled by Twitter in relation to the number of spam and bot accounts on the platform.
Elon Musk cannot back out of the deal, says Twitter
Based on spam allegations, Elon Musk insisted he no longer wished to purchase the company in May.
Twitter rejected his claims and filed a lawsuit asking a court in Delaware to hold Musk to the deal, arguing that Mr. Musk cannot back out of the deal. A trial is set for next month.
Twitter’s lawsuit states, “Musk apparently believes that he—unlike every other party subject to Delaware contract law—is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away.”
The social media giant says that fewer than five percent of its monetizable daily active users (those who are able to look at adverts) are bots, but Mr. Musk argues it could be many times higher.
For years in regulatory filings, Twitter has said that it believes about five percent of the accounts on the platform are fake, so if the social media platform prevails at trial, the judge could order the Tesla CEO to pay billions of dollars to the company or even complete the purchase.
As the court hearing nears in October, Elon Musk has sought to use revelations by Twitter whistle-blower Pieter Zatko as part of his justification for abandoning his bid.
Twitter’s current value below the $44 billion deal
Just before the shareholder decision, network security expert Pieter Zatko testified before the Senate Judiciary Committee in Washington about alleged security flaws.
Mr. Zatko told US lawmakers that the firm was “misleading the public” about how secure the social media platform is and went on to say that Twitter was “a decade behind” security standards.
Currently, Twitter is valued at $32 billion, a figure that is considerably below the $44 billion offer from the Tesla CEO and the world’s richest person, Mr. Musk.
Tuesday’s shareholder vote could have spelled the end of Twitter’s legal pursuit, but they have now given the company the green light to pursue Mr. Musk in court.
Twitter whistle-blower Mr. Zatko has previously supported Elon Musk’s claim that the platform has more spam and fake accounts than it has admitted, though he didn’t elaborate on this on Tuesday.
As an issue of national security, a judge last week said that Mr. Musk’s lawyers would be allowed to use the Twitter whistle-blower’s testimony in court.