Twitter and Elon Musk lawyers will face each other for the first time on Tuesday in a preliminary hearing in an unprecedented legal battle between the world's richest man and the social network , determined to be redeemed by his slayer.
The platform launched lawsuits a week ago against the boss of Tesla and SpaceX to force him to honor his commitment to the to acquire for 44 billion dollars.
And although she is going through an image crisis after months of attacks and denigrations from her ex-suitor, she is the favorite.
“Twitter's stock has been in good shape” since the complaint was filed, noted analyst Dan Ives of Wedbush Securities. “It seems that many investors who read it concluded that this Game of Thrones showdown in the courts is going to end in a victory for Twitter.”
By “victory”, the expert hears a judge's decision that would force Elon Musk to buy the Californian group at the price agreed at the end of April (54.20 dollars per share) or to pay substantial damages.
The wealthy entrepreneur unilaterally broke the agreement on July 8, on the grounds that the board of directors of Twitter would not have provided him with reliable information on the number of fake accounts active on the network.
But the odds of him getting away with only paying out the deal severance pay ($1 billion) or being declared in his right are considered very low.
Litigation depends on the Delaware Court of Chancery, a court in this small state in the eastern United States, specializing in business law. Its president Kathaleen McCormick — the first woman in this position — took on the case.
“She is a very serious judge, who will not be intimidated by one or more other of the parties. (…) In the past, she has not been tender with those who show bad faith”, remarks Adam Badawi, professor of law at the University of Berkeley.
In his complaint, Twitter accused Elon Musk of being “hypocritical” and “bad faith”.
Lawyers for the company believe he has changed his mind in the face of the recent drop in stock market valuations of technology companies.
“After putting on quite a show to target Twitter, and after proposing and then signing a merger deal, Musk seems to believe he's free — unlike any party under a legal contract. of Delaware — to change your mind, defame the company, disrupt its business, destroy its stock value and wash your hands of it,” they said.
Kathaleen McCormick is particularly known for having forced Kohlberg, a company that had also tried to break off an engagement, to buy the company in question, DecoPac.
The fate of the blue bird, a social network used in the world by politicians, celebrities, activists and influencers, seems to have little in common with that of less prominent organizations.
But “it's not different enough, I think, for Delaware to risk its reputation by deciding not to implement the terms of the agreement”, considers Adam Badawi.
Tuesday's hearing must address the question of the date of a possible trial.
Twitter asked for an accelerated procedure, as early as September , so as not to prolong the period of uncertainty which is partly paralyzing the company.
Elon Musk's lawyers filed an appeal on Friday for hostilities not to begin before next year.
They assure that experts will have to analyze “mountains of data” to prove, as asserts the multibillionaire, that the platform is full of automated accounts and spam, well beyond the proportion of 5% officially indicated.
The judge should also take into account the deadlines of the financial arrangement negotiated with banks and investors, so as not to jeopardize the possibility of a takeover.
The businessman and the board of directors may still choose to agree on a slightly lower price and thus avoid the lawsuit.
“But it would be a rational reasoning”, underlines Adam Badawi, in reference to the unpredictability of Elon Musk, who acts as a “free electron”.
In another case tried in Delaware, Musk “showed a willingness to go all the way,” said adds the professor. “And he won. I don't think his instinct is necessarily to come to an arrangement.”