Back in April, Tesla and SpaceX CEO Elon Musk made major waves when he announced his intent to purchase the social media platform Twitter in its entirety. The potential acquisition would have cost Musk billions in shares but would have given him complete ownership of the site. However, since then, Musk has raised concerns about an alleged prevalence of bot accounts on Twitter and began stalling the deal until the site agreed to share more information with him.
On Friday, after months of back and forth, Musk announced that he was no longer interested in buying the site. According to a note from his lawyer, Musk said that the original deal he and the board of Twitter signed was “in material breach of multiple provisions.”
“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 lawyer said in a letter. “This information is fundamental to Twitter’s business and financial performance and is necessary to consummate the transactions contemplated by the Merger Agreement.”
“Twitter has failed or refused to provide this information. Sometimes Twitter has ignored Mr. Musk’s requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr. Musk incomplete or unusable information.”
Twitter shares fell more than 5% in premarket trading on Monday, as investors anticipated a legal battle between the company and Elon Musk. Twitter’s stock has lost a third of its value since April 25, when Musk’s offer to buy the platform was accepted. https://t.co/C1GjQKMDpp
— The New York Times (@nytimes) July 11, 2022
Twitter’s shareholders, however, are not content to let Musk walk. Many are of the opinion that Musk’s delay of the deal was a deliberate effort to drive Twitter’s stock price down, so he could either obtain it for less than the originally-agreed amount or have justification to back out. Indeed, as of this morning, Twitter’s stock value had dropped by 5% on the heels of the news. As such, the shareholders intend to take Musk to court to force him to honor the signed deal and go through with the acquisition.
“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,” Twitter board chair Bret Taylor said in a tweet Friday. “We are confident we will prevail in the Delaware Court of Chancery.”
Image Source: Elon Musk @ Instagram