Elon Musk doesn’t want to buy Twitter anymore.
Legal documents filed by Musk’s legal counsel yesterday can confirm that the Tesla and SpaceX CEO is walking away from the $44 billion deal because he thinks that Twitter has been “in material breach” of multiple provisions of the merger agreement.
One of the major ones is that Musk believes Twitter isn’t being honest about the makeup of its users. The business magnate and investor, who has a net worth of over $200 billion, thinks that there are more bots and fake accounts than what the platform has been letting him in on, effectively voiding the deal.
Twitter isn’t pleased and will do what it can to get the acquisition through, according to a recent tweet from Bret Taylor, Twitter’s chairman, who confirmed that the company will be taking legal action to enforce the merger 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,” tweeted Bret Taylor, Twitter’s chairman. “We are confident we will prevail in the Delaware Court of Chancery.”
Twitter provided an estimate earlier this year about how spam and fake accounts comprised less than 5% of its users, something that Musk apparently didn’t agree with. The company also recently reported a rise in daily active users to 229 million based on advertising data, although internal errors have resulted in the company overstating user numbers in the past.
Musk had claimed that he’d be bringing all kinds of changes to Twitter, including an edit button and long-form tweets, something that would allow users to go beyond 280 characters per post. He also hinted that Twitter’s algorithm might be made public.
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
Mr Musk’s letter made clear that his lawyers considered the agreement to be cancelled because of what he believes to be a failure to provide detailed information about fake accounts and Twitter’s measures of daily active users.
It closed by confirming that his lawyers intended to terminate the agreement and abandon the transaction.
But Mr Taylor’s tweet indicates that Twitter will be fighting that decision, and forcing Mr Musk to uphold the agreement.
The merger agreement includes a $1bn breakup fee that was supposed to be paid by Mr Musk to Twitter in case the deal did not go through. But Mr Taylor’s tweet suggests that it will instead push for the deal to be completed.
Source: SEC (via The Independent)