CNBC’s David Faber surprised his fellow panelists on Monday by asserting that Elon Musk’s upcoming legal battle with Twitter over their nixed $44 billion takeover agreement could result in jail time for the eccentric billionaire.

Faber made the bold claim during a discussion with fellow CNBC personalities Jim Cramer and Carl Quintanilla regarding Musk’s decision to walk away from the agreement due to concerns about spam bots within Twitter’s user base.

Cramer quipped that Twitter’s board was “in trouble” if their lawsuit only resulted in the company recouping a $1 billion breakup fee from Musk.

“There’s no way they’re going to take the walkaway fee,” Faber said. “They have specific performance in the contract. They are going to have a Delaware judge enforce that contract and say, these are the reasons why.”

“Then the question is, ok, you are forcing Mr. Musk to buy the company, does he actually agree to do it?” Faber added. “There is this argument being said lately that, well, maybe he won’t comply with that. Then we would have a situation where they could put him in jail.”

David Faber
David Faber warned of potential jail time if Elon Musk ignored a judge’s decrees during the legal battle.
David Faber
David Faber’s assertion surprised his CNBC colleagues.
Squawk on the Street

Faber’s remark, first reported on by Mediaite, drew surprised laughter from Quintanilla, who called the idea of Musk going to jail over the nixed deal “funny.”

“I know you laugh, but that’s where we could end up,” Faber said. “This is a man who doesn’t play by the rules.”

Nevertheless, it’s not the first time experts have speculated over the prospect of Musk landing in the slammer over the Twitter mess. In May, Columbia law professor John Coffee told Fox Business News’ Charlie Gasparino that even in a civil suit, Musk could be slapped with contempt of court charges that could lead to jail.

“Twitter can sue for an injunction ordering him to close,” Gasparino tweeted on May 18, noting that the law professor called it a “very unusual but plausible” scenario. “If he violated that injunction, he could go to jail for contempt until he complied.”

Over the weekend, Bloomberg columnist Matt Levine noted the possibility that Musk could refuse to buy Twitter even if a Delaware court orders him — but also appeared skeptical that jail was a possibility.

“What if the court orders Musk to close the deal and he says no? They’re not gonna put him in Chancery jail,” Levine wrote.

“The guy is pretty contemptuous of legal authority; he thinks he is above the law and he might be right. A showdown between Musk and a judge might undermine Delaware corporate law more than letting him weasel out of the deal would,” he added.

Cramer jumped in on Monday to note that Faber’s assertion was likely to make waves with viewers.

“David, the takeaway is going to be ‘Faber says Musk going to jail.’ You’ve got about 10 seconds to repeal that,” Cramer quipped.

Elon Musk
Elon Musk posted memes poking fun at Twitter’s board.
AFP via Getty Images

Cramer again expressed shock in a tweet posted after the segment aired.

“Jail!?” Cramer tweeted.

Musk has yet to respond to Faber’s comments. The Post has reached out to CNBC and Musk’s office for comment.

Musk has already laughed off Twitter’s looming lawsuit, poking fun at the company’s board in a series of memes.

Musk’s camp indicated in an SEC filing last Friday that the billionaire was backing out of the Twitter deal. His legal team said that Twitter has repeatedly avoided inquiries about the number of spam bots within its user base – with Musk arguing that the number is far higher than the company claims.

Meanwhile, Twitter has already lawyered up and indicated it plans to pursue legal action to compel Musk to follow through on his original $44 billion offer. The company is expected to file suit in a Delaware court by early this week.


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Tyler Cowan