Musk would only have to show in due diligence that the company was not as materially represented in the purchase agreement. Twitter stated 5% fake users in that agreement and if his due diligence team find that in significant error, twitter is in breach. With the breach, Musk takes his $1 billion and then the shareholders sue. When Twitter settles (always goes to a class action judge) Musk makes another lower offer. Musk's only risk is that at the lower number and with the publicity, it might attract rival offers. As far as the SEC, if Twitter knowingly misrepresented the number of BOTS (highly likely), then they committed several serious crimes. Most important of these crimes is Securities Fraud. The US government isn't interested in putting rich people in jail, so that will most likely be a 9 figure fine and some board member may be banned from public boards. The fine also works in Musks favor.
Musk would only have to show in due diligence that the company was not as materially represented in the purchase agreement. Twitter stated 5% fake users in that agreement and if his due diligence team find that in significant error, twitter is in breach. With the breach, Musk takes his $1 billion and then the shareholders sue. When Twitter settles (always goes to a class action judge) Musk makes another lower offer. Musk's only risk is that at the lower number and with the publicity, it might attract rival offers. As far as the SEC, if Twitter knowingly misrepresented the number of BOTS (highly likely), then they committed several serious crimes. Most important of these crimes is Securities Fraud. The US government isn't interested in putting rich people in jail, so that will most likely be a 9 figure fine and some board member may be banned from public boards. The fine also works in Musks favor.
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