Twitter to Seek Shareholder Vote in August on Sale to Elon Musk

UTC by Tolu Ajiboye · 3 min read
Twitter to Seek Shareholder Vote in August on Sale to Elon Musk
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Top Twitter executives plan to organize a shareholder vote no later than August for opinions on the Musk acquisition deal.

Twitter Inc (NYSE: TWTR) will seek shareholder opinions via a vote in late July or early August to hash out its sale deal to Elon Musk. This development comes amid reports that the billionaire businessman might back out of the acquisition if Twitter fails to provide crucial spam account data. However, the social media giant stated that it would continue to share information with Musk.

Twitter will also share information described as the “firehose”. The firehose is a set of data comprising all tweets on the platform analyzed by different parameters, including tweet publication sources. Reports suggest that Twitter monetizes the firehose by selling the data to monitoring companies as part of its licensing business. However, the company wants to provide it to Musk for free as part of the ongoing information exchange between the two parties. Sources privy to the firehose also say that it contains no confidential information. Parties cannot view non-public details of Twitter users.

Last month, Twitter chief executive Parag Agrawal tweeted that calculating fake or spam accounts from outside the company is impractical. According to him, doing this would require private information that Twitter cannot share.

The planned Twitter shareholder vote will most likely consider many of the issues raised.

Prior to Impending Shareholder Vote, Musk Pondered Backing Out of Twitter Deal

On Monday, Musk threatened to abandon the  $44 billion deal over failure to provide spam account data. While this is not Musk’s first threat, the recent warning seemed to weigh heavier. In a letter delivered to Twitter’s chief legal officer Vijaya Gadde, Musk accused the social media giant of “material breach”. In addition, the Tesla CEO’s missive also stated that Musk reserved all rights to terminate the acquisition due to such “breach”. Responding to Musk’s letter, Twitter stated that it would ensure completion of the deal on the agreed terms. A statement from the social media company read:

“Twitter has and will continue to cooperatively share information with Musk to consummate the transaction in accordance with the terms of the merger agreement.”

Musk’s warning to Twitter also comes amid a general decline in several tech stocks, including Tesla Inc (NASDAQ: TSLA). Twitter shares closed down 1.5% at $39.57 on Monday, way off Musk’s initial acquisition offer of $54.20 per share.

Musk-Twitter Standoff

Some observers and analysts have commented on the standoff between Musk and Twitter. Wedbush analyst Dan Ives suggested that the billionaire businessman was reconsidering his decision to buy the company. Ives says Musk simply wants to walk away.

However, Dennis Dick, a proprietary trader at Bright Trading LLC, provided a different reason for Musk’s behavior. He opines that Musk was holding out as a ruse. Dick believes Musk’s true intention is to drive Twitter’s value down for a better bargain.

“It’s fairly obvious that Musk has buyer’s remorse and he is trying whatever to get a reduction in price, and I think he may succeed,” added Dennis Dick.

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Tolu Ajiboye
Author Tolu Ajiboye

Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.

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