Elon Musk has informed Twitter that he is ending his $44 billion deal to buy the social media company.
Elon Musk’s lawyer in a letter sent to Twitter on Friday alleged that the company made “false and misleading representations” when Musk agreed to buy the company on April 25 and has “breached” multiple provisions of the initial agreement.
In its response, Twitter said it will pursue legal actions to enforce the agreement with Musk.
After-hour shares of Twitter fell by 5.27% to close at $34.87 following the announcement by Musk’s lawyer.
Musk’s announcement comes after monthlong feud over how many spam and fake accounts are on Twitter.
The billonaire businessman and Tesla CEO requested that Twitter provide details supporting its internal estimate that less than 5% of the platform’s accounts are spam or fake.
In May, Musk said the deal is “temporarily on hold” as he awaits the data on the number of fake accounts on Twitter.
“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 lawyer wrote.
“This information is fundamental to Twitter’s business and financial performance and is necessary to consummate the transactions contemplated by the Merger Agreement because it is needed to ensure Twitter’s satisfaction of the conditions to closing, to facilitate Mr. Musk’s financing and financial planning for the transaction, and to engage in transition planning for the business.”
“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,” Musk’s lawyer added.
Despite multiple requests for more information regarding “the prevalence of false or spam accounts on the platform,” Twitter has not provided the information that Musk has requested, the lawyer alleges.
“While Twitter has provided some information, that information has come with strings attached, use limitations or other artificial formatting features, which has rendered some of the information minimally useful to Mr. Musk and his advisors,” the letter states.
Musk’s lawyer also alleges that “all indications suggest that several of Twitter’s public disclosures regarding its [monetizable daily active users] are either false or materially misleading.”
Twitter board of directors Chairman Bret Taylor responded to the letter on Friday evening, stating that it plans to pursue legal action to enforce the merger agreement between Musk.
“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,” 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.
— Bret Taylor (@btaylor) July 8, 2022
Ifunanya Ikueze is an Engineer, Safety Professional, Writer, Investor, Entrepreneur and Educator.