[anotherman554]

There was not a 1 billion dollar buyout option, the 1 billion dollar penalty was if he could not obtain financing, which he was perfectly capable of doing, or if a regulator blocked the deal, it wasn't something he had the right to use, just a penalty he would be forced to pay if he couldn't close the deal.

[rnk]

Oh I thank you for the extra information. I think he could have sabotaged the financing if you tried hard. So he agreed to pay for 44 billion odd dollars for Twitter no matter what? That's a very questionable deal.

[anotherman554]

I don't think it was a questionable deal, at least without 20/20 hindsight. Twitter wasn't looking for a buyer, and Musk really, really wanted to buy it (until he didn't). If you have a highly motivated buyer and a not particularly motivated seller, you would expect the deal to be favorable to the seller. In order to convince Twitter owners to sell the company Musk had to essentially make them an offer so good they couldn't refuse. What other outcome would you expect?

If Musk lost in court, was ordered to go through with the deal, and then sabotaged the financing to try to get out of the deal, potentially a court could have thrown him in jail and said, "You are lying about not being able to go through with the financing, we find you in contempt of court and you are staying in jail until you obtain financing and close the deal." It's not very plausible that the world's richest man can't find financing on the deal.

Potentially a court could have also instead said, "Since you sabotaged the financing, you are in breach of contract. Twitter is worth 22 billion dollars today. You offered 44 billion dollars to buy it. You are hereby ordered to pay Twitter 22 billion dollars to make them whole." Presumably the court could have forced him to sell assets to pay up.

I don't think anyone knows for sure what would have happened in court but it seems he had a very weak case.

[rsynnott]

I would suspect that if you sabotage funding to get out of a deal that you otherwise couldn’t get out of, the other party has a pretty good case to come after you for damages.

On it being a questionable deal, it’s not a consumer contract. It is assumed that both sides know what they’re doing in commercial deals; there’s little protection for incompetent participants. It might be questionable, but the participants have largely signed away the right to question it.