Elon Musk has dramatically announced that he is pulling the plug on his $44 billion acquisition of Twitter with his legal team accusing the social media giant of failing to provide accurate data on the number of fake and spam accounts on the platform.
Musk first made his offer to purchase Twitter in April, since then there have been repeated indications that he was seeking to walk away from the deal since April.
The world’s wealthiest man had earlier stalled on the deal after claiming that he wanted his team to do ‘due-diligence’ over the number of fake accounts on the platform.
In a letter to the Securities and Exchange Commission dropping the bombshell, Skadden Arps attorney Mike Ringler said that Twitter were in material breach of multiple provisions of the agreement.
Ringler wrote: ‘Twitter has not complied with its contractual obligations.’ He added also accused the company ‘of making ‘false and misleading representations’ when entering into the agreement.
It was previously reported that Musk would pay $1 billion if he backed out of the deal. Twitter could still attempt to hold Musk to the original deal or force a bigger payout for him walking away at the 11th hour.
In a brief statement on Twitter, Chairman Bret Taylor said: ‘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.’
In a letter dropping the bombshell, Musk’s legal team said that Twitter were in material breach of multiple provisions of the agreement
Last month, Twitter allowed Musk access to its ‘firehose’, a repository of raw data on hundreds of millions of daily tweets
One section of the letter reads: ‘Twitter has not complied with its contractual obligations. For nearly two months, Mr. Musk has sought the data and information necessary to ‘make an independent assessment of the prevalence of fake or spam accounts on Twitter’s platform.’
Musk’s legal team also accuses Twitter of ignoring and rejecting requests to data regarding fake accounts.
Musk had threatened to halt the deal unless the company showed proof that spam and bot accounts were fewer than 5% of users who see advertising on the social media service.
Last month, Twitter allowed Musk access to its ‘firehose’, a repository of raw data on hundreds of millions of daily tweets.
The Tesla founder’s team discovered that the number of fake accounts on the side was much higher than the 5% that was publicly disclosed, Musk said.
On the day of the announcement, Twitter’s shares were down 5%.
The news comes days after Musk confirmed that he secretly fathered twins with Neuralink director of operations, Shivon Zilis, pictured above
In June, Twitter’s board voted unanimously to accept Musk’s offer.
The news comes days after Musk confirmed that he secretly fathered twins with Neuralink director of operations, Shivon Zilis.
Musk has not tweeted about the decision to pull the teal saying. In his last tweet which was on the day before the announcement the South African billionaire wrote: ‘Super fired up for future product development with our awesome Tesla team! Such an honor to work with them.’