Musk’s plan to buy Twitter has worried politicians around the world.
Joe Skipper | Reuters
Less than three months after purchase agreement Twitter for 44 billion dollars, Elon Musk says he wants to leave. This is not surprising – Musk expressed remorse to the buyer shortly after he announced the deal.
Echoing Musk’s arguments, lawyers said Twitter was downplaying the number of bots and spam accounts on the platform. Just weeks after Twitter received after an unsolicited filing in late April, Musk began to publicly express doubts about the company’s number of fake and spam accounts.
“In short, Twitter did not provide the information Mr. Musk requested for nearly two months, despite its repeated detailed clarifications designed to make it easier for Twitter to identify, collect, and disclose the most critical information requested in Mr. Musk’s original requests.” , the message says. the lawyers wrote on Friday.
They added that inaccurate information provided by Twitter in the SEC disclosures “may provide additional grounds for terminating the Merger Agreement.”
Back in May, Musk said in tweet“Twitter’s deal is temporarily on hold pending details supporting calculations that spam/fake accounts do represent less than 5% of users.”
Meanwhile, the company’s shares were falling rapidly due to investors’ fears that the deal would fail. The day before Musk announced the deal was on hold, Twitter’s market cap dived nose $9 billion below Musk’s purchase price of about $44 billion. It didn’t help that the market as a whole collapsed due to the collapse of technology stocks.
Shares of Twitter fell another 5% after hours on Friday to $35.04 after dropping more than 5% in normal trading. They are now 35% below the $54.20 price that Musk agreed to pay.
Twitter is not ready to let Musk go. Bret Taylor, the company’s chairman, said on Friday that Twitter would take the matter to court.
“Twitter’s board intends to close the deal at the price and terms agreed with Mr. Musk and plans to take legal action to enforce the merger agreement,” Taylor wrote in a tweet. “We are confident that we will win in the Delaware Court of Chancery.”
Some analysts saw Musk’s public claims about spam Twitter accounts as a convenient bailout as the company’s value plummeted.
This was stated by Tony Sacconaghi from Bernstein. “Scream Box” CNBC that he believes Musk initiated “tactical talks” hoping that Twitter would eventually lower its selling price.
“The market has gone down a lot,” Sacconaghi said at the time. “He’s probably using the look of real active users as a bargaining ploy.”
Musk continued to draw attention to what he said was a serious problem of undercounting spam accounts, indicating that he saw the problem as an obstacle to completing the acquisition.
In mid-May, he again expressed to his audience of more than 100 million Twitter followers his doubts about Twitter’s accounting for spam accounts. He claimed at the time that Twitter CEO Parag Agrawal “refused to provide proof” that only less than 5% of accounts were fake or spam accounts.
“Yesterday, the CEO of Twitter publicly declined to provide <5% evidence,” Musk tweeted. "This deal can't move forward until he does."
In June, Musk again publicly commented on the prevalence of fake and spam Twitter accounts, stating that in Bloomberg event that “we are still waiting for a decision on this issue, and this is a very important issue.”
It’s a very different tone from the one Musk used when he aggressively pursued the deal earlier this year. In April he sent letter Taylor, who expressed his belief that the business “should be transformed into a private company” and that the messaging platform could “become a platform for free speech around the world.”
“Twitter has extraordinary potential,” Musk said at the time. “I will open it.”