Elon Musk says he is terminating Twitter buyout deal
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Tesla and SpaceX CEO Elon Musk has abandoned plans to purchase Twitter, his representatives confirmed yesterday. His departure has ended $44 billion worth of negotiations for what would have become one of the most expensive private tech acquisitions in modern history. And it has opened him up to a lawsuit, leaving many people questioning why he walked away.
Why has Elon Musk abandoned his Twitter deal?
Mr Musk’s cold feet over his deal with Twitter followed several weeks of hesitation.
In April, a month after the company accepted his offer, he put the deal on hold, citing “pending details” that would support a calculation that fake accounts made up fewer than five percent of Twitter’s roughly 330 million users.
The Tesla CEO argued there was no way for the platform’s executives to verify the number of fakes.
In May, Twitter CEO Parag Agrawal said: “Unfortunately, we don’t believe that this specific estimation can be performed externally, given the critical need to use both public and private information (which we can’t share).
“Externally, it’s not even possible to know which accounts are counted as mDAUs on any given day.”
The spam account issue appeared to have become a sticking point for Mr Musk, as filings he made to the US Securities and Exchange Commission (SEC) said he had “repeatedly” requested information on them Twitter was yet to fulfil.
Critics of the deal have alleged he used the issue as an excuse to pull out due to his diminished financial standing.
Mr Musk’s fortune comes primarily from Tesla, shares of which went for $1,008.62 each on April 25.
Unfortunately for him, that value has since plummeted exponentially.
Shares are currently worth approximately $752.29 as of July 9, as financial markets suffer from an overarching economic crisis.
Tesla has lost nearly a third of its total value, and Mr Musk’s deal will seem increasingly steep.
Neither he nor his representatives have officially explained why the deal fell through, as Mr Musk has not made one of his characteristic tongue-in-cheek posts for his more than 100 million Twitter followers.
Twitter’s representatives, however, have been more vocal since he opted to withdraw.
Board member Bret Taylor released a statement on the platform on July 8 that vowed the company would pursue him in court.
He said: “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.
“We are confident we will prevail in the Delaware Court of Chancery.”
Mr Taylor’s assurance that Twitter would “enforce the merger agreement” suggests that representatives could force the deal through.
Mr Musk may end up owning Twitter regardless of whether he pulls out.
But with the prospective owner yet to announce his reasoning or next steps, there is no indication of where the dispute will go.
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