Twitter has already spent $33 million on its nightmare deal with Elon Musk
AP
- Twitter spent $33 million on expenses related to Elon Musk's proposed takeover in Q2 this year.
- Those costs are set to balloon with Twitter facing off against Musk in court.
- Musk is trying to walk away from his proposal to buy Twitter for $44 billion.
Twitter's fight with Elon Musk is already costing the social media giant dearly.
Musk agreed to buy Twitter for $44 billion in April, but announced on July 8 he wants to abandon the deal.
Twitter said in its Q2 earnings report Friday it has already incurred $33 million in costs related to its "pending acquisition" by Musk.
Twitter also partially blamed a 1% drop in revenue on "uncertainty" caused by Musk's turbulent acquisition.
Twitter's costs will continue to rise as it is headed for a legal battle with Musk. Twitter has hired top corporate law firm Wachtell, Lipton, Rosen & Katz LLP to help it sue Musk with the aim of forcing him to adhere to his original agreement and buy the company.
Musk's contention is that Twitter gave him a false impression about the number of fake accounts on its platform. In its regulatory filings Twitter says roughly 5% of accounts are fake, but Musk's lawyers said the Tesla billionaires' analysis shows the figure is "wildly higher than 5%."
Twitter's lawyers said Musk's professed concern over fake accounts is a smoke screen and he only wants out of the deal because his Tesla shares have tanked.
Twitter won an early victory in its lawsuit against Musk as it was granted an expedited trial to minimize the "business risk" posed to the company.
Even if the initial judgement were to come quickly in Twitter's favor Musk could appeal the decision and make the case last up to three years Harry Kraemer, professor of management and strategy at Northwestern University's Kellogg School of Management, told Insider.
"The big, big winners in this one are gonna be the law firms," Kraemer said, adding: "These guys are gonna make a fortune."