Elon Musk says he is withdrawing from his $44 billion deal to buy Twitter, throwing the social media firm’s rapid future into doubt.
In a securities filing Friday, Musk accused Twitter of mendacity in regards to the variety of bots and spam accounts on the platform, in addition to failing to supply materials he requested for. That features detailed information on the variety of bot and spam accounts on Twitter, the corporate’s methodology for calculating person numbers and backup supplies detailing its monetary valuation.
“This information is fundamental to Twitter’s business and financial performance and is necessary to consummate” Musk’s buyout, the letter stated. “Twitter has failed or refused to provide this information. 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 letter goes on to assert that, regardless of Twitter’s alleged stonewalling, Musk’s advisors analyzed the variety of bots on the platform and decided that Twitter lied about their prevalence.
The true variety of bots on the platform “is wildly higher than 5%,” the letter stated, citing “[p]reliminary analysis by Mr. Musk’s advisors of the information provided by Twitter to date.”
Twitter has maintained that fewer than 5% of customers are spam or pretend accounts for so long as it has been a public firm.
Musk stated he notified Twitter of its lapses on June 6, that means the corporate’s time handy over the data he demanded is now expired, in response to the letter.
Twitter vows to sue
Twitter’s board chair, Bret Taylor, stated that the corporate would pursue authorized motion to pressure Musk to finish the sale.
“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,” Taylor stated on Twitter.
Twitter’s board authorised the buyout two weeks ago.
Beneath the acquisition settlement, Musk is on the hook for a $1 billion termination charge if the deal falls via.
A months-long saga
The mercurial Tesla founder’s transfer to abruptly pull the plug on the deal is the most recent twist in a monthslong drama that pitted the world’s richest particular person in opposition to a globally influential web firm. The competition performed out largely on Twitter itself, with either side battling for leverage by strategically releasing data on the platform.
Musk has been haranguing Twitter publicly in regards to the variety of bots on the platform, one thing that has lengthy been a gripe for the social media movie star with greater than 100 million Twitter followers. Musk has additionally vocally criticized Twitter’s message-posting practices and insurance policies, described the platform as an essential discussion board without spending a dime speech in making his play for the corporate and suggesting he would reverse its ban on former President Donald Trump as soon as he owned Twitter.
Many expertise analysts imagine that Musk’s public doubts about Twitter’s solvency — after he entered right into a binding settlement to purchase it — was a negotiating ploy to buy Twitter more cheaply. Musk made his preliminary supply to purchase in April, simply because the inventory market was starting its extended fall, decreasing the worth of Twitter in addition to Musk’s private fortune, a lot of which is in Tesla inventory.