Elon Musk Officially Files to Pull Out of $44 Billion Twitter Takeover

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Elon Musk’s protracted saga with Twitter took a dramatic turn on Friday after he officially filed to pull out of the $44 billion takeover agreement he reached in April. According to an SEC filing, Musk’s lawyers said he’s terminating the deal because Twitter is in “material breach” of the merger agreement and that the company has made “false and misleading representations” leading to the agreement.

For nearly two months, Mr. Musk has sought the data and information necessary to ‘make an independent assessment of the prevalence of fake or spam accounts on Twitter’s platform,’” Musk’s lawyers state in the filing. “This information is fundamental to Twitter’s business and financial performance and is necessary to consummate the transactions contemplated by the Merger Agreement because it is needed to ensure Twitter’s satisfaction of the conditions to closing, to facilitate Mr. Musk’s financing and financial planning for the transaction, and to engage in transition planning for the business. Twitter has failed or refused to provide this information.”

After the filing was made public, Twitter board chairman, Bret Taylor wrote that the company is “committed to closing the transaction” on the same terms agreed upon previously with the Tesla CEO and that it will “pursue legal action” to make sure the agreement is honored. “We are confident we will prevail in the Delaware Court of Chancery,” Taylor added.

Since reaching a $44 billion agreement to take Twitter private in April, Musk has openly criticized the company on the same platform stating there are a lot more spam bots on Twitter than the company has reported. Twitter has always stated that less than 5 percent of its total users are spam bots and even gave Musk access to its “firehose” in June to back up its claim. Despite Twitter’s stance on the number of fake accounts, the SEC filing by his lawyers to pull out of the agreement states that “Mr. Musk has reason to believe that the true number of false or spam accounts on Twitter’s platform is substantially higher than the amount of less than 5% represented by Twitter.”

Bloomberg reports that Twitter’s stock sunk further on Friday in what has been a difficult past few weeks for the company. In May, the company relieved some of its top executives of their duty and put a stop to all hiring processes. On Friday, employees were informed not to share anything about the deal on Slack or Twitter as the case is now an ongoing legal matter.

The news further throws uncertainty over Twitter’s future, and the case might be a long protracted legal battle for the troubled company.

Image: David Paul Morris/Bloomberg

Posted by Biodun

Passionate about Technology and everything concerning it. Avid Gamer and Music Lover. Loves Chelsea FC. Overall, a nice guy. Find me on Instagram and Twitter.

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