Previously, in April, the CEO of Tesla and SpaceX, Elon Musk, caused quite a stir by revealing his intentions to procure the entire social media platform Twitter. While this acquisition would have come at a substantial cost to Musk in terms of shares, it would have granted him full ownership of the platform. However, Musk has recently expressed reservations regarding the purported abundance of automated accounts on Twitter, leading him to delay the deal until the platform agreed to share more data with him.
After a series of discussions and negotiations, Musk declared on Friday that he is no longer keen on purchasing the platform. In a communication from his legal representative, Musk stated that the initial agreement between him and the Twitter board was “in clear violation of several stipulations.”
“For almost two months, Mr. Musk has been striving to access the necessary data to ‘independently evaluate the prevalence of fake or spam accounts on Twitter’s platform,'” as stated by Musk’s attorney in a formal letter. “This data plays a critical role in Twitter’s operations and financial standing and is essential for the completion of the transactions outlined in the Merger Agreement.”
“Twitter has either failed or resisted in furnishing this critical information. At times, Twitter has disregarded Mr. Musk’s inquiries, at times it has rejected them without valid reasons, and sometimes it has purported compliance while providing incomplete or ineffective information to Mr. Musk.”
The premarket trading on Monday witnessed a more than 5% decline in Twitter shares as foreseeing a legal dispute between Elon Musk and the company. Since Musk’s bid to acquire the platform was accepted on April 25, Twitter’s stock has depreciated by a third of its value. https://t.co/C1GjQKMDpp
— The New York Times (@nytimes) July 11, 2022
Meanwhile, Twitter’s stakeholders are not satisfied with Musk’s decision to step back. A majority believe that Musk’s delay tactics were a calculated move to drive down Twitter’s stock price, with the aim of acquiring the platform for a lower price than the agreed upon amount or providing grounds to withdraw. Apparently, in light of recent developments, Twitter’s stock value plummeted by 5% today. Consequently, the shareholders are gearing up to take legal action against Musk to enforce the agreed-upon deal and proceed with the acquisition.
“The Twitter Board is resolute in finalizing the deal based on the price and terms approved with Mr. Musk and intends to pursue legal recourse to uphold the merger agreement,” tweeted Twitter board chair, Bret Taylor on Friday. “We are confident in our triumph in the Delaware Court of Chancery.”
Image Source: Elon Musk @ Instagram
