Elon Musk vs Twitter: Will He Have to Follow Through On Its Acquisition?

Elon Musk tried to back out of a $44 billion Twitter acquisition deal in July, but things aren’t looking good for the Tesla CEO as the case goes on.
Written by Allison Stone
Reviewed by Serena Aburahma
Oct 6, 2022
Tesla
CEO Elon Musk has built an entire brand image around his bold personality and fast-acting impulses, but he may just have to eat his words following an ongoing legal battle over the acquisition of Twitter
among the other companies he owns
Musk claimed he was going to purchase Twitter back in April, but reneged on the offer by July. According to a recent story from
Bloomberg Law
, it may have been too late to change his mind. Read on with the car ownership experts at Jerry about the ongoing suit against Musk and what it could mean for the future of the EV brand. 
A little over a month ago, Tesla’s former law chief stepped down, leaving Dinna Eskin as the company’s new legal head. 
An affidavit released in September confirmed the news, with Eskin stating, “I have managerial responsibility over Tesla’s legal department, have sole authority to act in a leadership capacity over that department, and continue to serve in those roles through the present.”
Eskin is one of at least four lawyers to hold the title of general counsel since Jonathan Chang left the automaker in late 2019, but at least part of the company’s seemingly messy structure is by design. 
In an effort to dispel hierarchies within the company, Musk has resisted establishing a full-time general counsel and deploying more traditional C-suite titles to his staff. 
According to Eskin, “there is no Tesla employee with the formal title of ‘General Counsel,’ and my role as senior director of legal is functionally equivalent to the role commonly known as ‘General Counsel. It is well understood within Tesla that any references in Tesla’s internal documents to ‘General Counsel’ now refer to the senior director of legal.”

Shareholders approve Twitter deal 

According to
NPR
, Musk agreed to buy Twitter for a whopping $44 billion but tried to back out after voicing concerns about fake accounts on the platform. 
When he decided to back out, however, the agreement had already been signed. Twitter promptly sued him to follow through on the deal. 
While Musk himself may want out, Twitter’s shareholders feel differently. Approximately 98.6% of stockholders have approved the buyout, which will make getting out of it even harder for Musk. 
"The shareholder approval satisfies the final condition precedent to the closing of the merger under the merger agreement,” said Twitter, and all signs point to the Tesla CEO losing this case. 
Another story from
Business Insider
hints at Musk’s losing battle. "To me, all of Musk's claims are weak, and many are extremely weak," said law professor Robert Miller as reported by Business Insider. 
"It's well-established Delaware law that breaches of a merger agreement where an acquirer refuses to close, they're ordered to close," Miller said. "It has, in fact, happened every time this issue has been litigated."

What this means for Tesla

While the legal battle over Twitter isn’t directly related to the electric car company, this isn’t the first time that Musk’s eccentric persona and penchant for risk-taking have had an impact on his
company’s stock price
Much like other electric automakers, Tesla has faced ongoing supply chain woes, labor issues, and shortages of raw materials. Not only that, but Tesla is already facing its own share of legal battles and controversies, including investigations from the National Highway Traffic Safety Administration (NHTSA) over driver assistance features to allegations of discrimination within the company. 
Tesla cars remain some of the best-selling models on the market and tend to rank highly in owner satisfaction, but as the competition heats up among electric automakers, Tesla’s own internal struggles leave the company in a vulnerable position. 
If you’re shopping around for a new Tesla, look to
Jerry
for the best deals on car insurance. A licensed broker that offers end-to-end support, the Jerry app gathers affordable quotes, helps you switch plans, and can even help you cancel your old policy.
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