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In the Elon Musk-Twitter dispute, there are three likely outcomes

An out-of-court settlement would make the whole deal go away.

Elon Musk, founder of SpaceX and chief executive officer of Tesla Inc., speaks during a discussion at the Satellite 2020 Conference in Washington, D.C.Andrew Harrer/Bloomberg

The world’s richest man, Elon Musk, is famous for changing his mind. But his U-turn on buying Twitter could be one of his most costly moves yet.

The dispute is now in Chancery Court in Delaware, where Twitter is suing Musk to force him to complete the deal and Musk is countering to get out of the deal. On Tuesday, a judge hearing the case largely agreed with Twitter and scheduled a five-day trial in October, rejecting Musk‘s bid to delay the proceedings until next year.

Boston College law professor Brian Quinn, who was a mergers and acquisitions lawyer in Silicon Valley before joining academia, says there is almost no chance Musk will prevail in court.


Just a few weeks after the billionaire agreed to buy Twitter for $54.20 per share, or $44 billion, Musk began expressing reservations. Twitter’s stock price had plunged along with most other tech stocks, including Tesla, which makes up the bulk of Musk’s fortune. On May 13, the billionaire tweeted that his Twitter deal was “temporarily on hold.”

Musk complained that Twitter had misled him about the extent of spam accounts and bots infesting the service.

It’s a strange rationale for abandoning the deal, since Musk had said one of his main motivations to buy Twitter was to fix the problem of spam accounts and bots infesting the service. Musk has more than 100 million followers, but many are fake accounts that instantly respond to his posts with cryptocurrency scams or other rackets.

In an interview at the TED conference in April before he agreed to buy Twitter, Musk referred to one of his favorite cryptocurrencies and declared that “If I had a dogecoin for every crypto scam I saw, I would have a hundred billion dogecoin.” A week later, he tweeted: “If our twitter bid succeeds, we will defeat the spam bots or die trying!”


Twitter did not actually promise anything about the bot problem — or even mention it — in the 73-page sale agreement with Musk. The company did maintain that all of its securities filings were accurate, or in legalese, “fairly present in all material respects the consolidated financial position of the company.”

And Twitter’s prior filings said that fake accounts made up less than 5 percent of the monetizable daily active users it reports. Even that disclosure came with many caveats.

“It’s hard to take that as a serious argument because it’s not as if he was unaware of bots, in fact he probably was more aware than anybody else,” BC’s Quinn said in an interview. “It’s hard to imagine that’s going to be a successful argument in court.”

Three outcomes are most likely, Quinn said. The judge could force Musk to buy Twitter at the original price; the parties could renegotiate a lower purchase price in light of the stock market crash, or the parties could settle out of court.

“Twitter could say ‘you don’t want to buy us and we don’t want you to buy us, so there must be a number,’” Quinn said. “Some number that’s less than $44 billion and will be enough to let Twitter walk away happy.”

Such a settlement would involve Musk paying somewhere between $5 billion and $20 billion, Quinn estimated.

“For normal people that’s crazy,” he said. “But here we’re dealing with a different kind of person, and all the commas and the decimal point are in different places.”


Aaron Pressman can be reached at aaron.pressman@globe.com. Follow him on Twitter @ampressman.