A report that tech billionaire Elon Musk paid a private settlement following sexual misconduct claims by a flight attendant working on a private jet in 2016 is unlikely to affect Musk’s deal to buy Twitter, experts on the company’s acquisition said Friday, after Musk’s critics called for him to face the consequences.
Internet news website Insider reported on Thursday that SpaceX had paid the flight attendant $250,000 in severance pay after she claimed Musk sexually harassed her while she was working. The website, citing documents it said was obtained from a friend of the flight attendant, reported that the payment was contingent on the accuser not bringing future legal action.
Musk denied the allegations in a series of posts on Twitter late Thursday and Friday morning, calling them “completely untrue” and saying “it never happened.” He said the Insider report was a “hit piece” designed “to disrupt the Twitter acquisition.”
Musk and Twitter’s board of directors reached an agreement last month to take the company private in a $forty four billion deal, with Musk as the majority owner. According to Bloomberg News, Musk, the world’s richest person, said he wanted to buy Twitter to protect his free speech and loosen the rules for abandoning all tweets unless it violates local laws. I suggest that.
There aren’t many examples of other high-profile corporate transaction violations, but it’s clear that the allegations reported against Musk won’t change the minds of those involved in Twitter’s planned acquisition, the law and business school said.
David Yoffie, a professor at Harvard Business School who teaches a course in strategy and technology, said he believed the claims had “little or no impact” on bids to buy masks on Twitter. “It is highly unlikely that the Twitter board will change positions.
Mask funders are almost always friends who tend to be less angry and less likely to sway the lender,” Yoffie said. The Twitter transaction is not finalized and is expected to close later this year, subject to shareholder approval, funding and other hurdles.
Musk and Twitter announced the deal on April 25. While theoretically possible, Musk’s accusations are highly unlikely to urge Twitter shareholders to reject a takeover in the next vote, said Ann Lipton, professor of business law and dean at Tulane University.
Musk agreed to pay $54.20 for the shares. That’s 42 percent more than Twitter shares sold on Friday. This is natural because Elon deals directly with the owner and does not use market mechanisms. “If shareholders decide, ‘I want $54.20, but I don’t want to give my dearest baby to Elon Musk,’ shareholders can vote in favor of the deal, which is a past investor.
This will change a lot from the behavior of. Lipton said. Shareholders rarely prevent mergers or acquisitions. After considering 1,620 transactions between 1996 and 2017, shareholders have only five official votes, or a 0.3% chance of rejecting them. Twitter’s share price closed at $38.29, tied to Friday’s share price, up 2.7%.
Lipton agreed that Twitter’s board was unlikely to walk away from the deal. He said that under the laws of the state in Delaware, where Twitter is founded, the board has an obligation to maximize shareholder wealth and could face shareholder lawsuits if it considers anything other than the price Musk is willing to pay.
Transactions may fail due to suspected business breaches. According to Morgan Ricks, executives at Tyco International, including former CEO Dennis Kozlowski, have $170 million in corporate funding to throw parties and buy expensive items.
After accusing him of using it, he left the other two companies Tyco wanted to buy. Professor of Law at Vanderbilt University studies mergers. However, there is one difference in the transaction structure of Twitter transactions.
He said Tyco bought the target company in Tyco stock instead of cash, and the stock became toxic when the scandal broke out. “The target company doesn’t want any more stock,” Rix said. But now, Twitter shareholders should be getting the same money. “$54.20 is $54.20,” he said.
In another case, Microsoft began considering buying game publisher Activision Blizzard last year after negative reports from Activision’s CEO hurt the target company’s stock price and made it a cheaper deal.
According to experts, Mask lenders and co-investors are unlikely to stop trading as the report is unlikely to include an estimate of Mask’s monetization capacity on Twitter unless there are further claims or reports regarding payments. “It’s not that I don’t understand the man’s story,” Lipton said, citing allegations of sexual harassment at SpaceX and Tesla, two of Musk’s CEOs. The Flight Attendant Fee is the only personal expense for the mask.
As we all know, Elon Musk is very unique and very unpredictable. But that move is another Elon game, and one can imagine if he manages to win.
“I can imagine a world where investors and creditors are reluctant to lend money to sexual harassment suspects, but that’s definitely not the world,” Lipton said. “I didn’t know much that the extra cost would be the straw that Morgan Stanley said, “Oh, we’re always wrong.” “
Morgan Stanley has agreed to borrow $2 billion for Twitter transactions, more than any other bank, the Financial Times reported this month. The bank did not immediately respond to a request for comment on Friday. Twitter trading is a roller coaster ride for investors and Twitter users.
Stock market expansions have plummeted in recent weeks, making the deal less economically attractive to Musk. He later said the deal was temporarily suspended and complained about Twitter’s handling of spambots, but Twitter executives did not.
“Getting out of the bank is probably what Mask wants, and what Twitter doesn’t want in this assessment,” Rix said. Twitter owners seem to be teasing Twitter ratings. What really emphasizes Twitter is that Elon is an entrepreneur who is quite successful in developing a business, but it is necessary to examine the real reason Elon wants to acquire.
On the other hand he is a developer of a very sophisticated technology company compared to Twitter which is so simple. The basic question arises today, why is Elon so eager to acquire Twitter.
Does he want to take his twitter account during college that was hacked by someone else or does he just want to take a chat with his first girlfriend via Twitter? Who knows, but what we do know is that rich people like to joke around with their money, but it’s a bit difficult for the general public to accept.