Billionaire Elon Musk, who offered to buy social media messaging company Twitter, Inc., is attempting to terminate his $44 billion (£36 billion) bid for Twitter, claiming repeated violations of the agreement. The announcement in the latest knot in a long-running affair that began in April when the world’s richest person offered to purchase Twitter. The Tesla CEO stated that he withdrew because Twitter failed to offer sufficient information on the quantity of spam and false accounts. Twitter said it intends to litigate to enforce the deal.
On Friday afternoon, Musk announced the latest twist in a whirlwind procedure in which the Tesla CEO became the company’s largest shareholder with 9% share holding, declined a board seat, agreed to buy the social media platform, and then began raising doubts about the deal’s viability. The next chapter in the tale is almost certainly going to be a courtroom brawl.
According to a regulatory filing Friday evening, a lawyer for Musk said in a letter to Twitter’s top lawyer that he is terminating the transaction because Twitter is in significant breach of various conditions of the original agreement, which was signed in April.
The billionaire’s lawyer claimed that Musk had requested, but had not received, data such as the daily number of active users for eight quarters. It had also not provided information on “the sample set used and calculations performed” by Twitter to check if the spam and fake accounts account were less than 5% of its monetizable daily user base.
The world’s richest man has been expressing worries for weeks that there are more bots and spam accounts on the site than Twitter has officially stated. Twitter has stated that it counts bots on its network using public and private information from its users, such as ISP numbers and location data.
Analysts suspect that the concerns are an attempt to establish a pretext to get out of a purchase that he may now regard as expensive, following the recent declines in Twitter shares and the larger tech sector. Tesla stock, on which Musk planned to rely in part to finance the deal, has also plummeted since he agreed to it.
Even if the case proceeds, analysts believe that the two sides will continue to communicate, and the situation might be resolved by a renegotiated sale price.
( Photo Credit Sergei Elagin )