Elon Musk has called off his $44bn deal for Twitter, citing failures to provide information on fake accounts and the departure of a number of senior executives, setting up a legal battle with the social media company which wants to make him go through with it. The Telegraph has the story.
Mr. Musk’s lawyers said in filings that Twitter had failed or refused to respond to multiple requests for information on fake or spam accounts on the platform, which is fundamental to the company’s business performance.
The Tesla boss’s representatives also objected to the loss of senior executives at Twitter since the deal was finalised.
“Three executives have resigned from Twitter since the Merger Agreement was signed: the Head of Data Science, the Vice President of Twitter Service, and a Vice President of Product Management for Health, Conversation, and Growth,” lawyers wrote in a filing, calling the departures “a material breach” of the deal.
Brett Taylor, Twitter’s chairman, pledged to fight Mr Musk in court to force him to complete the deal, which was agreed in April.
“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,” Mr Taylor tweeted. “We are confident we will prevail.”
Shares of Twitter fell 7% in late trading to $34.25. Mr. Musk had agreed to buy Twitter for $54.20 per share.
Under the terms of the agreed deal, Mr Musk is on the hook for a $1 billion termination fee.
Dan Ives, an analyst at Wedbush Securities, said: “This is a disaster scenario for Twitter and its Board as now the company will battle Musk in an elongated court battle to recoup the deal and/or the breakup fee of $1 billion at a minimum.”
Twitter has claimed around 5% of accounts are fake, but Musk has estimated it to be more like 20% and called for a Securities and Exchange Commission investigation into Twitter’s 5% figure. Managers have refused to share their methodology.
This is obviously disappointing for anyone who was hoping that Musk’s takeover would be the start of a new era of free(r) speech online, or would just like occasionally to be able to disagree with the woke without being banned.
Worth reading in full.
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Oh well never mind.
Damn. Some twitter feeds were sometimes genuinely interesting. I had hopes. Now? To hell with it.
Read substack.
I don’t know why anyone would want to buy Twitter. Not only is the whole set up rotten to the core, you now have the deep state gunning for it. Its a poison chalice, and I believe its past its peak. I wouldn’t join Twitter if you paid me.
I think Musk eventually figured that out.
It was always a publicity stunt. The man is a charade. A con man.
I couldn’t give a hoot about Twitter. It’s a private network, they can do what they like with people’s tweets. Under Musk it would have been worse, though.
I know Musk has a few bob to spare, but a billion dollars on a publicity stunt? I am sure if he wanted publicity that much there are better ways to spend a billion dollars.
It could be a publicity stunt without having to pay – unless he loses in court, in which case he could lose a lot more. As Brett says, it’s good business for the legal trade.
Musk will not lose in court. Twitter thought they could somehow hide their bots.
Round and round the money goes.
Where it comes from, no-one knows.
His “few bob” are completely wrapped up in the TSLA scam.
Oh dea another nay sayer. Musk is this or that or whatever. Envy, jealousy is such a waste of time. Musk is hardly a charade. But you must think whatever it is you like.
Looks like being Lose-Lose-Win. The later being the lawyers.
Patrick Boyle was always sceptical that the purchase would go ahead https://www.youtube.com/watch?v=_SfXoCj4TLk
Why have I never heard of Patrick Boyle? On the strength of this video alone, he seems to see Elon for exactly what he is – a charlatan whose word nobody serious really trusts.
Thanks for the intro, YouDontSay.
He’s good at wry financial commentary 🙂
Calm down dears.
This is usual choreography during acquisitions where the buyer is trying to beat down the acquisition price after due diligence reveals all is not quite as originally presented by the seller.
We’ll see.
Doubt it. Elon has no intention of buying Twitter. He doesn’t have the cash – his net worth is almost all TSLA paper, and it would be difficult to sell $42Billion’s worth without triggering a TSLA selloff, which would be a self-reinforcing downward spiral (because TSLA trades on green unicorn juice, green dreams and green rainbows and the word of Elon Himself The Almighty Who Is Tesla and Tesla is Elon).
Musk was never going to buy Twitter. He’s just exposed and undermined their trustworthiness. Job done. Well done Elon 👏
Great decision Mr. Musk. Twitter is effectively done.