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Elon Musk seeks to terminate $44 billion Twitter deal
By Shubhangi Mathur - Jul 08, 2022, 08:11 PM ET
Last Updated - Mar 11, 2024, 03:00 PM EDT
Musk decides to end the Twitter deal blaming the company for not providing information on fake accounts
• Musk decides to end the Twitter deal blaming the company for not providing information on fake accounts
Billionaire Elon Musk is seeking to terminate his $44 billion deal to buy Twitter Inc (NYSE: TWTR) citing the social media platform’s failure to provide information on fake accounts.
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Musk, the Tesla Inc (NASDAQ: TSLA) CEO and the world’s richest man, decided to end the deal as Twitter was unable to comply “with its contractual obligations,” according to a SEC filing on Friday.
The tension between the billionaire and the media company began over fake or spam accounts on the platform.
Twitter had earlier disclosed in a filing that fewer than 5% of its monetizable daily active users during the first quarter were bots or spam accounts.
Musk, on the other hand, said Twitter did not provide him with relevant business information to assess the social media company’s claims and even suggested the figure could be closer to 20%.
“Twitter has not provided information that Mr. Musk has requested for nearly two months notwithstanding his repeated, detailed clarifications intended to simplify Twitter’s identification, collection, and disclosure of the most relevant information sought in Mr. Musk’s original requests,” said Musk’s lawyer in a letter to securities regulators.
Twitter, though, has continuously said it was complying with his requests.
Earlier in May, Musk had put the deal temporarily on hold citing the same reasons.
Twitter shares were down about 6% after hours on Friday.
Musk, though, cannot just walk away from the deal as the San Francisco-based company prepares for a possible legal battle.
Twitter’s board chairman Bret Taylor said on Friday that the company is committed to close the deal with Musk and plans to pursue legal action to enforce the agreement.
“The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery,” he said.
Under the terms of agreement when Musk first agreed to buy Twitter, the Tesla CEO had pledged to pay $1 billion if he backs out.
Twitter shares have plummeted dramatically since its board accepted Musk’s offer to buy the company at $54.20 per share. Shares of the company settled at $36.81 as of Friday’s market close, compared to $51.70 per share as on the day of the accepting the offer.
Picture Credits: Reuters
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