By @SMB_AcquisitionAttorney on Twitter

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BREAKING: @elonmusk did not "buy Twitter."

Now that we've all sobered up, let's have a frank conversation.

This deal is far from done.

A thread on how this actually works: I was shocked by the reporting of the proposed Elon Musk-Twitter take private yesterday.

Headlines like this we're everywhere:

"Elon Musk BOUGHT Twitter. Here's what he says he'll do next"

Tweets from smart people read like this:

.twitter.com/embed/Tweet.html?creatorScreenName=SMB_Attorney&dnt=true&embedId=twitter-widget-0&features=e30%3D&frame=false&hideCard=false&hideThread=true&id=1518573466114478080&lang=en&origin=https%3A%2F%2Fthreadreaderapp.com%2Fthread%2F1518947960297562112.html&sessionId=6c27b9e9715518e02868a43fcb65d5982572eda3&theme=light&widgetsVersion=c8fe9736dd6fb%3A1649830956492&width=550px

A going private transaction is a long process with many potential pitfalls.

Don't believe me and think it's a slam dunk?

Then why isn't the stock price trading at the $54.20 that Elon is willing to pay?

Is it free money if you buy now or is there risk it won't close? The stakes here are massive!

Richest person acquiring a powerful communication platform
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Largest going private in the last two decades ($44 B)
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Recent public and regulatory scrutiny of (think: DJT), social media and free speech
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Intense scrutiny and social pressure! As a baseline, "going private" is a term that describes a transaction (or series of transactions) where a controlling stockholder or other affiliated person reduces the number of stockholders of a public company.

This allows the company to terminate its public company status. There are many reasons why companies choose to go private.

In this case, the reason is clear, it would give complete control of the company.

It will also likely allow the company to operate more efficiently without concerns for its public stockholders. Yesterday, the board of directors of Twitter voted to unanimously approve the transaction...

"subject to the approval of Twitter stockholders, the receipt of applicable regulatory approvals and the satisfaction of other customary closing conditions."

Elon Musk to Acquire Twitter/PRNewswire/ -- Twitter, Inc. (NYSE: TWTR) today announced that it has entered into a definitive agreement to be acquired by an entity wholly owned by Elon...https://www.prnewswire.com/news-releases/elon-musk-to-acquire-twitter-301532245.html

Stockholder approval -

Wait! But, can't Twitter's board just approve the transaction?

The answer is emphatically "No!"

Twitter's board does not own the company, its stockholders do!

The board has approved the transaction, and agreed to *recommend it* to the stockholders. 

Government sign off -

Additionally, the government needs to review the deal.

And the government really seems to love Elon!

Although they are not likely to stop the transaction on antitrust grounds, this means time.

Lots of time (read: several months)

TIME KILLS DEALS! 

Legal challenges -

Further, most going private transactions are challenged in court.

The typical claim is that the board of directors breached their fiduciary duties and disclosure obligations.

Given the high profile, expect many claims to be made here.

More time! 

Competing bids -

In the meantime, every major acquisitive financial institution in the world is currently analyzing to see if a "topping bid" is viable.

Under Delaware law, now that Twitter's board has decided to sell the company, its only duty is to get the HIGHEST PRICE. 

Competing bids (cont) -

This means that if Twitter receives a bid that is even a few pennies higher than 's bid, they likely have a duty to accept that offer instead.

We're watching this exact scenario play out with Spirit Airlines right now!

JetBlue makes all-cash offer for Spirit Airlines, complicating planned Frontier tie-upJetBlue's bid comes less than two months after Spirit and Frontier agreed to merge into a discount airline behemoth.https://www.cnbc.com/2022/04/05/spirit-airlines-shares-spike-20percent-on-report-jetblue-has-made-bid-to-buy-airline.html

All in, Twitter expects this process to take at least three to six months.

However, it's quite likely it will take more time than that.

So, sit back, grab some popcorn, and enjoy the show! TLDR:

The stakes in the Elon-Twitter acquisition are massive and the deal is far from done.

Expect drama over the next 3 to 6 months around the following:
• social pressure
• shareholder vote
• regulatory approvals
• government interference
• potential competing bids 

P.S., this note is not intended to be commentary on the social, financial or other merits of the transaction.

In my opinion, the pros/cons of this transaction will be determined over time. 

Disclaimers -

This thread is strictly for educational and informational purposes, and not for the purpose of marketing any legal services or seeking legal employment and is not motivated by pecuniary gain, and should not be interpreted as legal or any other form of advice.

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