Elon Musk is putting a condo on his wrist and backing out of a $44 billion agreement to purchase Twitter.
In a filing Friday afternoon, the Tesla CEO said he believed Twitter was in material breach of multiple provisions of the April 25 sale agreement.
The biggest issue was Twitter’s failure to share information about the number of fake and spam accounts on the social media platform.
The filing states:
Twitter has not provided information that Mr. Musk has requested for nearly two months notwithstanding his repeated, detailed clarifications intended to simplify Twitter’s identification, collection, and disclosure of the most relevant information sought in Mr. Musk’s original requests.
Shortly after the deal was done, Elon began second-guessing the move and took to Twitter to let folks know it.
On May 13, he announced the Twitter deal was on temporary hold because he wanted the scoop on the fake and spam accounts.
To add insult to injury, Twitter fired two key, high-ranking employees and announced they were laying off a third of its talent acquisition team.
The move prompted Elon Musk to accuse them of failing to continue to conduct regular business, which is another breach of the purchase contract.
On June 6, Elon raised the stakes of the deal when his attorney filed a letter indicating that part of his financing for the deal was contingent on his receiving the bot information to evaluate the business.
His lawyer wrote:
Musk is clearly entitled to the requested data to enable him to prepare for transitioning Twitter’s business to his ownership and to facilitate his transaction financing.
On June 8, Elon was reportedly given the access toe even more information, including account activity and a raw feed.
Some are suspecting Elon Musk is making a big stink about the bots in an effort to slide out of the deal because he agreed to purchase Twitter at $54.20 a share and the stock has plummeted to $36.81, which lowers the value of the company by $14 billion.
Twitter board chair Bret Taylor tweeted Friday the company intends to pursue legal action to close 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.
See the original tweet below.
An employee, who wishes to remain anonymous has mixed feelings about the deal seemingly falling apart.
I guess it feels like we won.
But it feels like the end of the movie, where the characters are bloodied and bedraggled with a Michael Bay explosion behind them.
We could see this was coming, but in the meantime, he’s f**king destroyed the company.
What are your thoughts on Elon Musk pulling out of the Twitter deal?
Source: NBC News