Musk’s plan to buy Twitter has worried policymakers around the world.
Joe Skipper | Reuters
Less than three months after agreeing to buy Twitter for $44 billion, Elon Musk said he wanted to go out. No surprise – Musk has expressed buyer remorse since shortly after he announced the deal.
The attorneys representing Musk sent a Letters on Friday for Vijaya Gadde, Twitter’s chief legal officer, to explain why Tesla The world’s richest man and CEO have no plans to strike a merger deal.
Recalling the arguments Musk has made, the lawyers argue that Twitter reduces the number of bots and spam accounts on the platform. Just a few weeks after Twitter Has been approved In late April, Musk began publicly voicing doubts about the company’s tally of fake and spam accounts.
“In short, Twitter has not provided the information Mr. Musk has requested for nearly two months, despite his detailed, repeated explanations intended to simplify identification, collection and disclose the most relevant Twitter information that Mr. Musk originally requested,” the attorney wrote on Friday.
They added that the incorrect information provided by Twitter in the SEC disclosures “could create additional grounds for termination of the Merger Agreement.”
Back in May, Musk said in a tweet“Twitter temporarily resolves pending details supporting the calculation that spam/fake accounts actually represent less than 5% of users.”
Meanwhile, the company’s shares fell sharply as investors worried that the deal would fall apart. The day before Musk said the deal was on hold, Twitter’s market capitalization nosedived $9 billion less than Musk’s roughly $44 billion purchase price. It doesn’t help when the broader market is collapsing, leading to a crash in tech stocks.
Twitter shares fell another 5% in a few hours on Friday to $35.04 after falling more than 5% in regular trading. They are now 35% less than the $54.20 price Musk agreed to pay.
Twitter is not willing to let Musk go. Bret Taylor, the company’s president, said Friday that Twitter will pursue the case in court.
“The Twitter Board is committed to closing the transaction on the price and terms agreed with Mr. Musk and plans to pursue legal action to enforce the merger agreement,” Taylor wrote in a tweet. “We are confident that we will prevail in the Delaware Premier Court.”
Some analysts see Musk’s public statements about spam accounts on Twitter as a convenient way to bail out as the company’s value grows.
Bernstein’s Toni Sacconaghi mentioned above CNBC’s “Squawk Box” that he believes Musk is instigating a “negotiation tactic,” in the hope that Twitter will eventually lower his sales price.
“The market has gone down a lot,” Sacconaghi said at the time. “He may be using the guise of real active users as a bargaining ploy.”
Musk continued to draw attention to what he said was the main problem of the lack of spam accounts, suggesting that he views the issue as an obstacle to completing the acquisition.
In mid-May, he once again expressed to his audience of more than 100 million Twitter followers his suspicions about Twitter taking over spam accounts. At the time, he accused Twitter CEO Parag Agrawal of “refusing to give evidence” that less than 5% of accounts were fake or spam accounts.
“Yesterday, the CEO of Twitter publicly refused to give evidence of rates <5%," Musk wrote on Twitter. "This deal cannot go on until he does."
In June, Musk again commented publicly on the prevalence of fake accounts and spam on Twitter, saying that in “We’re still waiting for a resolution on that, and it’s a very important issue.”
Earlier this week, The Washington Post report that Musk and his associates were unable to verify Twitter’s spam statistics and that the deal was in jeopardy, causing Twitter shares drop 4%.
That’s a far cry from what Musk said when he was aggressively pursuing a deal earlier this year. In April, he sent a Letters Taylor expressed her belief that the business “needs to be transformed into a private company” and that the messaging platform has the potential to “become a platform for free speech globally.”
“Twitter has extraordinary potential,” Musk said at the time. “I’ll unlock it.”
CLOCK: He probably realized that it wouldn’t be fun to own Twitter
