Elon Musk backs out of $44 billion Twitter purchase deal

Elon Musk is ending his $44 billion bid to buy Twitter, alleging multiple breaches of the merger agreement.

The announcement is the latest event of this deal which was first reported after Musk decided to buy Twitter in April.

Musk said he had ended the deal because Twitter failed to provide sufficient data on the number of spam and fake accounts.

Twitter says it plans to pursue legal action to enforce the agreement.

Musk faces a $1bn break-up fee and a possible lawsuit by ending it.

In May, Musk had said the deal was “temporarily on hold” as he was awaiting data on the number of fake and spam accounts on Twitter.

He had asked for evidence to back Twitter’s claim that spam and bot accounts make up less than 5% of its total users.

In a letter filed with the US Securities and Exchange Commission, Musk’s lawyer said Twitter had failed or declined 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 Musk incomplete or unusable data,” the letter reads.

It is correct that Twitter has a larger number of fake accounts. On Thursday, Twitter said it removed around 1 million spam accounts daily.

Musk believes that such accounts could account for 20% or more of Twitter users.

There are other potential reasons why Mr Musk might want to pull out of the deal.

Some others have speculated that Musk has ended the deal likely because the stock market price for large tech companies has fallen in the last few months. Tesla’s own share price has fallen since after the Twitter deal was announced.

Twitter chairman Bret Taylor said Twitter would pursue legal action to ensure the deal went ahead.

“The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Musk,” Taylor wrote in a tweet.

Shares in Twitter dropped by 7% in extended trading after the announcement.





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