Elon Musk Could Find Himself Behind Bars For Twitter Deal, CNBC Analyst Says
CNBC analyst David Faber said that he believes Tesla CEO Elon Musk could go to prison because of his failed deal to acquire Twitter.
Twitter chairman Bret Taylor has vowed to take legal action against Musk as his decision to back out of the deal could damage Twitter’s stock price and value.
“Then the question is: you are forcing Mr. Musk to buy the company, does he actually agree to do it?” the CNBC analyst said.
“There is this argument being said lately that, well, maybe he will not comply with that. Then we would have a situation where they could put him in jail,” he said.
Others on the panel laughed at the idea that Musk could go to prison for not doing the deal but Faber insisted that he could.
“That’s where we could end up,” he said.
.@davidfaber referring to @elonmusk “this is a man who doesn’t play by the rules”. pic.twitter.com/tdyyhHM62j
— Jilianne (@MissJilianne) July 11, 2022
“A reverse breakup fee paid from a buyer to a target applies when there is an outside reason a deal can’t close, such as regulatory intermediation or third-party financing concerns. A buyer can also walk if there’s fraud, assuming the discovery of incorrect information has a so-called ‘material adverse effect.’ A market dip, like the current sell-off that has caused Twitter to lose more than $9 billion in market cap, wouldn’t count as a valid reason for Musk to cut loose — breakup fee or no breakup fee — according to a senior Mergers and Acquisitions lawyer familiar with the matter,” CNBC reported.
Twitter executives have hired a high-powered legal team after billionaire Elon Musk announced late last week he is pulling out of the $44 billion deal to buy the platform.
According to a report from Bloomberg on Sunday, Twitter has hired Wachtell, Lipton, Rosen & Katz — big names in business merger law — to enforce Musk’s original agreement.