Elon Musk on brink as Twitter investigates his $44 billion attempted takeover

Elon Musk says he is terminating Twitter buyout deal

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According to legal experts Twitter is also looking into his motivation for backing out of the deal. Twitter sent dozens of civil subpoenas this week to global banks such as Morgan Stanley, co-investors in the deal including an affiliate of Brookfield Asset Management Inc and Musk associates according to filings at the Delaware Court of Chancery.

The subpoenas seek documents and communications in relation to the deal, its financing and any information on ‘bot’ or fake Twitter accounts.

They are also looking for information about the potential impact on the deal of the changing stock price of electric car manufacturer Tesla, which is owned by Mr Musk.

The subpoenas are part of the legal action Twitter has launched against Mr Musk.

Twitter is attempting to hold the Space X founder to the deal of the $54.20(£44.50) per share price he had previously agreed to.

A five day trial is expected to begin on October 17 at Delaware Chancery Court.

According to experts the subpoenas indicate that Twitter wants to know what lenders, investors and advisers were saying to each other about Mr Musk’s behaviour after he signed the deal in late April.

Minor Myers, a professor at UConn School of Law, said: “They suspect that behind the scenes he’s been conspiring to blow the whole thing up.”

On July 8 Mr Musk said he was backing out of the deal as Twitter had breached the agreement by withholding data about fake accounts on the site. 

However Twitter has hit back arguing that the fake accounts issue is a distraction.

Mr Musk has also cited the firing of high-ranking executives and one-third of the talent acquisition team.

According to the billionaire, this breached Twitter’s obligation to “preserve substantially intact the material components of its current business organisation”.

Mr Musk cannot be forced to go through with the deal if financing fails as long as he is not the cause of the failure of funding, according to legal experts. 

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Experts have also argued that Twitter will be interested in understanding lenders’ concerns about the number of fake accounts on the platform.

They want to know if the issue of fake accounts was an issue for them as suggested by Mr Musk.

Writing on Twitter Joe Lonsdale, a co-founder of Palantir Technologies Inc argued that he was unfairly sent a Subpoena.

He said: “lol, lawyers w/ TWTR are sending subpoenas to friends in the ecosystem around @elonmusk.

“I have nothing to do with this aside from a few snarky comments, but got a ‘YOU ARE HEREBY COMMANDED’ document notice.”

He also called Twitter’s subpoenas a “giant harassing fishing expedition”.

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