Elon Musk pulls out of the USD 43B Twitter deal

You left items in your cart, Mr Musk.

Elon Musk announced previously that he is acquiring Twitter. However, just three days ago, he suddenly rejected the deal according to the letter sent by his lawyer. Twitter is still willing to close the deal according to Salesforce co-CEO and Twitter Board Member Bret Taylor

Mike Ringler, Elon Musk’s lawyer, claimed that Twitter did not provide sufficient information to Musk in order to complete the transaction. He also claimed that the company also falsely represented the prevalence of spam and fake accounts on the platform, as stated in the letter that he had sent.

“Twitter has failed or refused to provide this information,” Ringler claimed. “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.” He added.

Back in April, Twitter and Musk signed a merger deal that Musk would buy Twitter for USD 54.20 a share. If either side broke off the deal, there may be a penalty to pay USD 1 Billion to the other party.

For years, Twitter said that less than 5% of its daily userbase are spam or fake accounts. However, Musk refuted this claim and countered that this number can potentially be higher, about 20%. This is even after Twitter gave its “firehose” of public data. The platform also mentioned that its spam statistics are based on private data and not public ones. These data include IP addresses, phone numbers, location, and behaviour of the user. These private data make it hard for outsiders to verify.

In response to the back-out, Twitter Board Member Bret Taylor would bring Elon Musk to court and force him to go through the process. Elon had signed on what’s apparently called a “specific performance clause”. “We are confident we will prevail in the Delaware Court of Chancery. Taylor said.

Source: NPR, CNBC