September 26, 2023

Brighton Journal

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Florida Pension Fund sues Elon Musk and Twitter to stop takeover | Florida

Elon Musk and Twitter were sued Friday by a Florida pension fund seeking to prevent Musk from completing its $44 billion acquisition of the social media company before 2025.

In a class action lawsuit filed in Delaware Chancery Court, the Orlando Police Pension Fund said Delaware law prohibits a rapid merger because Musk had agreements with other large companies. Twitter Shareholders, including his financial advisor Morgan Stanley and Twitter founder Jack Dorsey, to support the acquisition.

These agreements made Musk, who owns 9.2% of Twitter, the de facto “owner” of more than 15% of the company’s shares, the fund said. It said that would require postponing the merger for three years unless two thirds of the non-“owned” shares agreed to it.

Morgan Stanley owns about 8.8% of Twitter stock and Dorsey owns 2.4%.

Musk hopes to complete a $54.20 stake purchase on Twitter this year, in one of the world’s largest leveraged acquisitions.

Musk, the world’s richest person, runs the electric car company Tesla and leads The Boring Co and SpaceX.

Twitter and its board of directors, including Dorsey and CEO Parag Agrawal, have also been named as defendants.

Twitter declined to comment. Misk and . lawyers Florida The fund did not immediately respond to requests for comment.

The lawsuit also seeks to declare that the Twitter administrators have breached their fiduciary duties, and to recover fees and legal costs. It did not explain how shareholders believed they might be harmed if the merger closed on schedule.

Thursday Musk She said He has raised about $7 billion, including from investors such as tech mogul Larry Ellison, the Qatari government investment fund and the world’s largest cryptocurrency exchange, to help fund the acquisition.

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according to deposit With the SEC, Ellison is putting $1 billion into the deal. According to the filing, Saudi investor Prince Alwaleed bin Talal, who initially opposed the purchase, agreed to transfer his $1.9 billion stake to the deal.

The filing also showed that the margin loan that Musk took to fund the deal would drop from $12.5 billion to $6.25 billion.

The news of the funding came as CNBC reported that Musk will serve as interim CEO of the social media platform for a few months. Once the deal is closed.

Musk had no financing when he announced plans to buy Twitter last month.

Some new investors seem to share an interest with Musk, a self-described “free speech absolute” who could change how the San Francisco-based company manages content.

The Florida State Pension Fund also invests in Twitter, and the state’s governor, Ron DeSantissaid this week that he could make a profit of between $15 million and $20 million if Musk completed his purchase.

On Friday, the New York Times reported that Musk said he would fivefold his revenue to $26.4 billion by 2028 from $5 billion last year, citing a proposal made to investors.

Under Musk, the company will reduce its advertising from 90% to nearly 45% of the company’s total revenue. Ads will generate $12 billion in revenue and subscriptions of nearly $10 billion in 2028, according to the document, the publication mentioned.

Another goal in the proposal is to increase Twitter followers to 931 million and hire more than 3,500 additional employees. Twitter has 229 million daily users worldwide.

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In afternoon trading, Twitter shares were down 60 cents at $49.76.