Elon Musk and Twitter may be stuck with each other — and that could change the trajectory of the long-running battle over speech on the platform.
After Musk pulled out of his deal to buy Twitter, Angelo Carusone, president of progressive watchdog Media Matters for America, hailed it as a step back from a “dark future” where the platform acts as a “supercharged engine of radicalization.” Donald Trump Jr., writing on his father’s Truth Social app, declared there is “zero chance of free thought or speech” on Twitter going forward.
Both sides should take a breath — despite Elon Musk’s Friday filing with the SEC, which proclaimed an intention to abandon his $44 billion deal to purchase Twitter, the Tesla CEO is not off the hook. Twitter intends to sue to enforce the deal on the “price and terms agreed upon by Mr. Musk,” and legal observers say the company has a strong case. In other words, Musk may still be forced to buy the tech platform.
The possibility opens up a new set of questions regarding the future of Twitter’s moderation policies and its impact on elections.
Even before former President Donald Trump transformed it into a digital bully pulpit, the platform possessed a political footprint much larger than its relatively modest user base would suggest. Turning Twitter over to a mercurial billionaire forced to pay through the nose for a company he doesn’t want may not bode well for the future of the platform. And while the fine print appears to allow Twitter to force itself on Musk, the Delaware Court of Chancery may hesitate to compel an ownership transfer that undermines a key channel of political communication.
“Forcing Musk to buy something he doesn’t want? He’s the richest guy in the world, he might just shut it off,” said Adam Sieff, a lawyer specializing in tech issues at Davis Wright Tremaine. “And that’s not necessarily in the public interest.”
Back when the deal was finalized in April, many legal observers highlighted a $1 billion walkaway fee included in the merger agreement between Musk and Twitter. But before Friday, less attention was paid to a clause allowing the parties to seek “specific performance” if either tries to back out. The legal term means Twitter can sue to enforce the contract in its entirety — and Ann Lipton, a professor of business law at Tulane University, said a judge could require Musk to take ownership of the platform as promised.
“Delaware courts have ordered reluctant buyers to go through with mergers before,” Lipton said.
There are many ways a miffed Musk could sabotage Twitter, from pulling the plug outright to loosening its moderation policies until it becomes unusable. Lipton said judges may weigh those possibilities — and their potential political consequences — before they stick Musk with the full bill.
“While Twitter is legally correct and Delaware courts have ordered specific performance before, they’ve never done so in a case this high-profile,” Lipton said.
Musk’s lawyers say it’s Twitter that violated the deal. They point to Musk’s claim that the company is still understating its spambot problem, and say Twitter failed to provide Musk with enough information and improperly fired two of its executives after the deal was signed.
But outside lawyers say there’s little merit to those claims. Sieff noted Musk’s lawyers were “very careful not to make factual representations” when discussing Twitter spambots, instead emphasizing their client’s “beliefs” on the matter. “That’s a lawyerly way of saying, ‘I don’t have proof,’” Sieff said. He also said Twitter will likely be able to show that Musk’s repeated requests for more information were made with the express intent of sinking the deal. And he called Musk’s argument on the firing of Twitter executives “kind of lame.”
“Elon Musk had been tweeting he was going to fire everyone anyway,” Sieff said.
Lipton agreed that Musk’s arguments “are really not that convincing,” and said Twitter “has a strong case.” And one person with knowledge of the situation said Friday that Twitter was not surprised by Musk’s move, and is confident its side of the contract is airtight.
It’s possible the two sides will settle their dispute before it hits a courtroom (though likely for more than $1 billion, which most lawyers see as the floor for Musk’s potential losses). But if they don’t, Musk runs a real risk of being ordered by a judge to pay Twitter’s sticker price.
Even Trump thinks Musk might be stuck with Twitter. “Who the hell knows what’s gonna happen, he’s got a pretty rotten contract,” the former president said at a rally on Saturday. A Twitter spokesperson declined to comment beyond the company’s Friday press release.
