Elon Musk is trying to stop his $44 billion (£36 billion) deal to buy Twitter because he says the contract has been broken many times.
The announcement comes after the richest man in the world decided to buy Twitter in April. It is the latest part of a long story. Because Twitter didn’t disclose enough details on the quantity of spam and false accounts, according to Mr. Musk, he withdrew.
In order to enforce the agreement, Twitter claims it will file a lawsuit. The chairman of Twitter Board, Bret Taylor, said, “The Twitter Board is committed to finalizing the deal on the price and terms agreed upon with Mr. Musk.” This could set the two parties up for a long legal battle. A $1bn (£830m) break-up fee is a part of the original merger agreement.
When asked about the acquisition in May, Mr. Musk said it was “temporarily on hold” until he knew how many spam and fake Twitter accounts there were.
The corporation claimed that less than 5% of its users were spam and bot accounts, but the billionaire businessman demanded proof to support this claim.
According to a letter Mr. Musk’s attorney filed with the US Securities and Exchange Commission, Twitter has either failed or refused to furnish this information, as per the letter.
According to the letter, Twitter has “at times ignored Mr. Musk’s requests, at times rejected them for reasons that appear to be unjustifiable, and at other times pretended to comply while providing Mr. Musk with inadequate or unusable information,” according to the letter.
Spam accounts are created with the intention of disseminating information to a sizable audience and controlling how they use the platform. Twitter announced on Thursday that it removes approximately 1 million such accounts daily.
According to Mr. Musk, up to 20% or more of Twitter users may be spam or automated account users.
Following the announcement, shares of Twitter dropped by 7% in extended trade.
Elon Musk has been attempting to learn how many daily active Twitter users there are for several weeks.
Bots are an issue for Twitter. In fact, it claimed to eliminate a million spam accounts daily just yesterday.
Read Also: Elon Musk puts an end to ‘work from home’ initiative for Tesla employees
Mr. Musk stated in a filing that he wanted to end the agreement because he had frequently been denied information regarding the number of Twitter bot accounts.
But Elon Musk has already signed this agreement, so it’s not entirely clear if he can back out at this point. Mr. Musk will have to prove that Twitter breached their contract.
There may be further justification for Mr. Musk backing out of the agreement.
Has the stock price of major IT firms declined precipitously in recent months? Did Musk make an excessive offer?
The effect the possible merger might have on Mr. Musk’s other businesses was another factor. Since he expressed interest in Twitter, Tesla’s stock price has drastically decreased.
