Musk is permitted to tweet about the deal under the terms of the acquisition agreement, but he is not permitted to disparage the firm or its representatives.
The world’s richest man agreed to limit his tweets as part of a 95-page agreement covering his $44 billion acquisition, which was filed on Tuesday.
However, Musk responded to tweets from two political commentators who criticized Twitter staff a day after signing the agreement, which was published on the website of the US Securities and Exchange Commission.
Musk responded on Tuesday night to a tweet from podcast host Saagar Enjeti, who mentioned an article claiming Twitter’s legal head, Vijaya Gadde, became “emotional” during a meeting to discuss the deal. Enjeti referred to Gadde as Twitter’s “top censorship advocate” in the post, referring to the company’s decision to block sharing of a New York Post story about President Joe Biden’s son Hunter in 2020.
“Suspending the Twitter account of a major news organization for publishing a true story was obviously incredibly inappropriate,” Musk responded.
His intervention elicited negative tweets about Gadde from users, including one quote tweet in response stating that she would “go down in history as an appalling person,” while other posts demanded that she be fired.
Musk also responded to a potentially defamatory tweet about Twitter’s deputy general counsel, Jim Baker, from rightwing commentator Mike Cernovich, which mentioned Baker’s previous work at the FBI. Musk responded, “Sounds pretty bad…”
Twitter was contacted for comment.
Despite the agreement, Eleazer Klein, a partner at the US law firm Schulte Roth and Zabel, said Musk’s tweets would not have surprised the company. “The fact that he would be vocal about his beliefs cannot come as a surprise or be unanticipated,” he said. You’d think the company would think about what’s really at stake in this case for the deal to move forward.”
Musk would also have to pay Twitter $1 billion if he walked away from the deal, according to the terms of the agreement. The break clause, which is a common feature of takeover agreements, would be triggered if the deal’s financing fell through. Twitter will also have to pay the entrepreneur a $1 billion fee if it accepts a higher bid elsewhere.
Musk has put together a $46.5 billion funding package for the deal, and his own contribution has worried Tesla investors, who wiped $126 billion off the company’s value on Tuesday amid fears that the billionaire may have to sell shares in the electric carmaker to fund his share. Musk is contributing $21 billion in his own equity to the Twitter deal, as well as a further $12.5 billion loan secured against his Tesla stake.
Musk’s penchant for attention-grabbing tweets that are avidly consumed and retweeted by his 86 million followers is also addressed in the document filed with the US financial watchdog.
“The equity investor shall be permitted to issue tweets about the merger or the transactions contemplated hereby so long as such tweets do not disparage the company or any of its representatives,” the agreement states.
The legal definition of disparagement, according to Merriam-Webster, is “the publication of false and injurious statements that are derogatory of another’s property, business, or product.”