It was a week of ups and downs for Elon Musk, the richest man in the world.
On the one hand, Robert Miller, a lawyer and academic expert in mergers and acquisitions and who knows very well the laws of Delaware, the state where the lawsuit initiated by Twittter is being processed, for abandoning its offer to buy USD 44,000 million from the social network, analyzed the litigation and concluded that Musk has less than a 10% chance of winning the trial. Already when he made it, Musk’s offer for Twitter was generous and exceeded the market value of the company. After the stock market crash of recent months, the gap is even greater: Twitter today has a capitalization of USD 33.5 billion, that is, more than USD 10 billion less than what poor Elon would be forced to pay.
On the other hand, he finally had the pleasure of presenting yesterday, Friday, a prototype of the humanoid robot “Optimum” developed by Tesla, his automotive company.
Optimum is capable, among other things, of watering plants, transporting boxes and moving metal barriers. Musk presented it at an event on Artificial Intelligence, one of his passions, at a Tesla facility in Palo Alto, California. Over there, the richest man in the world was enthusiastic when explaining that the robot uses machine learning software and sensors developed by Tesla, its most important company, main asset and world leader in the production of electric vehiclesa segment of the automotive industry that he created practically from scratch and in which today the world’s largest manufacturers and car brands are lagging behind.
where humans dare not
Last year, Musk had announced that his company was working on a robot to perform dangerous tasks and that his creation would have profound economic implications.
Delaware Judge Kathaleen McCormick has broad powers to compel Musk to serve any sentence — from taking control of Tesla stock to sending him to jail, Miller said.
The litigation with Twitter is different. “To me, all of Musk’s claims lack force. Many are extremely weak,” Miller said in a session with Wells Fargo analysts in which he discussed the conflict. “I think Musk will lose, and if he does, I’m sure he will be required to close the deal,” Miller said, adding that the billionaire entrepreneur would also be required to pay the $44 billion he offered. .
The Delaware court in which the conflict is aired, in charge of the judge kathleen mccormickhas broad powers to coerce Musk into serving any sentence — from taking control of Tesla stock to sending him to jail, Miller said.
The case is strange. Musk only needs to convince McCormick of one of his several lawsuits against Twitter, while Twitter needs to convince the judge of all of its accusations against Musk, but Miller still estimated that the Tesla owner has less than a 10% chance of prevailing and more 90% of being forced to buy the social network, effectively paying for its multimillion-dollar offer.
“It is well established in Delaware law that breaches of a merger agreement in which an acquirer refuses to close are usually resolved in favor of the acquired company; It has happened every time this matter has been litigated,” Miller explained, as reported by Business Insider.
there are not so many
Among the reasons for withdrawing his offer, Musk accused Twitter of exaggerating its number of daily and monetizable users, a metric known as mDAU, and of having more bots and fake accounts than it admits, something he considered fraudulent, and stated that the social network violates data privacy laws and does not have intellectual property rights over some of its tools, for which it is based on the complaint of the former head of Twitter Information Security, Peiter Zatko. In addition, he accused Twitter of violating the laws of Texas, the place where he himself lives for much of the year.
According to Miller, Musk must prove not only that his accusations are true, but that they negatively affect the operation and value of Twitter.
By case, said the lawyer, Musk knew at the time he made his offer that Twitter had bots and had even stated in a press release that he was going to defeat them, but later claimed that he did not suspect that there were so many of them and that they exceed, he alleged, 5% of his accounts. According to Miller, Twitter’s response to that accusation is so meticulously worded that even if Musk were to prove that bots are more than 5%, Twitter’s responses would not necessarily be false or fraudulent. Moreover, he himself should prove that Twitter knew “better or more accurate” ways to estimate the number of bots, and did not apply them.
Regarding the privacy issue, the legal expert said that, beyond the statements of Zatko, the former Twitter employee, in the purchase agreement that Musk and the social network had reached, there were no clauses on cybersecurity to which the Tesla owner can hold on to his lawsuit.
Musk also accused Twitter of “material omissions” regarding the intellectual property of some of its tools, but -again- “Twitter’s files before the US Securities Commission” lack clearly fraudulent or misleading statements “in this regard. and the signed agreement was very lax on those issues and, according to Miller, very favorable to Twitter. For instance, the agreement says that “to the best of the company’s knowledge,” Twitter does not infringe the intellectual property rights of third parties, and that if it does, they have no “material adverse effect” on the company. “It is almost impossible to imagine that this statement, formulated in this way, turns out to be false,” Miller said.
Texas vs. Delaware
Finally, Elon Musk manages three of his companies, Tesla, SpaceX and The Boring Company, from Texas, and accused Twitter of violating the stock market regulations of that state, which are less demanding than those of Delaware, where the litigation is being processed. However, Miller said, “Musk has a better chance of going to Mars and having this resolved under Martian law than he is allowed to do so under Texas law.”
The presentation of the robot, which weighs 57 kilos, has a 2.3 KWh battery, connectivity to WiFi and LTE networks and can travel up to 8 kilometers per hour, was a much more pleasant event for the owner of Tesla, a fan of developments such as artificial intelligence and self-learning. When it goes on sale, Optimus will cost just under $20,000, Musk himself estimated.
In any case, if he loses the litigation with Twitter and is forced to buy it for USD 44,000 million, he will need to sell more than 2.2 million children of Optimus twins to pay the bill.