Twitter sues Elon Musk after pulling the plug on $44 billion acquisition deal | Science and tech news

Elon Musk has pulled out of a deal to acquire Twitter for $44 billion (£36.5 billion).

In a statement to the U.S. Securities and Exchange Commission, representatives of: Mr Musk Twitter said it had violated the terms of an agreement and “appears to have made false and misleading statements”.

They said Twitter had also failed to provide the data and information requested by Mr. Musk to enable him to “make an independent assessment of the prevalence of fake or spam accounts” on the social media platform.

“Sometimes Twitter has ignored Mr. Musk’s requests, sometimes it has rejected them for reasons that seem unwarranted, and sometimes it has claimed to comply while giving Mr. Musk incomplete or useless information,” the statement continued.

As a result of Mr. Musk’s decision, Twitter shares fell 7% during extended trading, well below the $54.20 he offered to pay for the company back in April.

Under the terms of the deal, Musk must pay a $1 billion (£830 million) termination fee if he does not complete the transaction.

However, it appears that Twitter’s board has no intention of accepting the payment and will instead take legal action.

Twitter relies on legal action

Twitter chairman Bret Taylor tweeted that the company is “committed to closing the transaction on price and terms agreed with Mr. Musk and intends to take legal action to enforce the merger agreement”.

“We are confident that we will prevail in the Delaware Court of Chancery,” he added.

The potential unraveling of the deal is just the latest twist in a saga between the world’s richest man and one of the most influential social media sites.

Much of the drama has played out on Twitter, with Mr. Musk — who has more than 95 million followers — complaining that the company was failing to live up to its potential as a platform for free speech.

Musk had put deal on hold

Tesla’s CEO had previously threatened to pull the deal unless the company proved spam and bot accounts were less than 5% of users seeing ads on its service.

Last month, Twitter gave Mr. Musk access to his “firehose,” the raw data storage location of hundreds of millions of daily tweets.

Read more:
Twitter to provide Musk with raw daily tweet data ‘out of concern about fake accounts’
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Musk’s flirtation with buying Twitter appeared to begin in late March when Twitter said he’d reached out to members of the board — including co-founder Jack Dorsey — telling them he was buying up stock in the company and interested in either joining. become of the board, or take Twitter. private or starting a competitor.

He later revealed in a registration application that he had become the largest shareholder in the company after acquiring a 9% stake worth approximately $3 billion.

Initially, Twitter offered Mr. Musk a seat on the board.

But six days later, the Twitter CEO tweeted that Mr. Musk would not be on the board after all, and his offer to buy the company came together soon after.

‘This is a disaster scenario for Twitter’

Within Twitter, Mr. Musk’s offer was met with confusion and falling morale, especially after he publicly criticized one of Twitter’s top attorneys involved in content moderation decisions.

After the deal was closed, the company imposed a hiring freeze, cut discretionary spending and fired two top executives.

Mr. Musk’s decision is likely to lead to a lengthy legal battle between the billionaire and the 16-year-old San Francisco-based company.

Daniel Ives, an analyst at Wedbush, said it was bad news for Twitter.

“This is a catastrophic scenario for Twitter and its board of directors, as the company now battles Musk in a lengthy lawsuit to recoup the deal and/or the $1 billion rescission fee,” he said.