Elon Musk, the CEO of Tesla and the world’s richest person, has decided to back out of a $44 billion deal to buy social media giant Twitter as it has apparently breached multiple provisions of the merger agreement, as per NBC news.
According to NBC News, Musk said he believed Twitter was in material breach of multiple provisions of the April 25 sale agreement — including his request for Twitter 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.”
In response to Musk’s filing, Twitter board chair Bret Taylor tweeted recently that Twitter intends to pursue legal action to finalise the deal.”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.”
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
Musk began having doubts about the existence of bots on Twitter after hearing about it during quarterly securities filings – Twitter has regularly disclosed in quarterly securities filings that it believes no more than 5% of the accounts on the site are fake or automated. Due to this, Musk’s attorneys filed a letter indicating that part of Musk’s financing for the deal relied heavily on Musk receiving the bot information to evaluate the business.
The lawyers said, 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.”
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