Elon Musk says he is terminating $44bn Twitter deal
Twitter’s chairman says the social media platform will take legal action to enforce the agreement.
Elon Musk has said he is terminating a $44bn deal to buy Twitter, saying the social media company did not provide information about fake or spam accounts on the platform.
In a filing to the Security and Exchange Commission (SEC) on Friday, Musk’s lawyers said Twitter had failed or refused to respond to multiple requests for information on those accounts, which is fundamental to the company’s business performance.
“Sometimes Twitter has ignored Mr. Musk’s requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr. Musk incomplete or unusable information,” the filing reads.
“Twitter is in material breach of multiple provisions of that Agreement, appears to have made false and misleading representations upon which Mr. Musk relied when entering into the Merger Agreement,” it also said.
Twitter did not immediately respond to requests for comment from The Associated Press and Reuters news agencies.
The company’s chairman, Bret Taylor, tweeted on Friday evening that, “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”.
The terms of the deal require Musk, the CEO of Tesla, to pay a $1bn break-up fee if he does not complete the transaction.
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.
— Bret Taylor (@btaylor) July 8, 2022
The board unanimously agreed to sell the platform to Musk for $44bn in April, in a deal that stirred controversy and questions about free speech and misinformation on the popular social media platform.
The agreement’s possible unravelling is just the latest twist in a saga between one of the world’s richest men and one of the most influential social media sites.
Much of the drama has played out on Twitter, with Musk, who has more than 95 million followers, lamenting that the company was failing to live up to its potential as a platform for free speech.
Last month, Twitter allowed Musk access to its “firehose”, a repository of raw data on hundreds of millions of daily tweets.
The company said at that time that it intended to close the deal at the agreed price and terms. “Twitter has and will continue to cooperatively share information with Musk to consummate the transaction in accordance with the terms of the merger agreement,” it said in a statement.
In May, Twitter CEO Parag Agrawal said the social media network estimates that fewer than 5 percent of all its users are fake.
But in a series of tweets, he highlighted the challenge of weeding out real people from bots and accounts being used for spam campaigns.
“The hard challenge is that many accounts which look fake superficially – are actually real people,” he wrote. “And some of the spam accounts which are actually the most dangerous – and cause the most harm to our users – can look totally legitimate on the surface.”
Daniel Ives, an analyst at Wedbush investment firm, said Musk’s filing on Friday was bad news for Twitter.
“This is a disaster scenario for Twitter and its Board as now the company will battle Musk in an elongated court battle to recoup the deal and/or the breakup fee of $1 billion at a minimum,” he wrote in a note to clients.