Elon Musk terminating $44 billion deal to buy Twitter; says social media giant is ‘in material breach of multiple provisions’

Elon Musk wants to end his $44 billion deal to buy Twitter — the latest in a whirlwind process in which Tesla’s billionaire CEO became the company’s largest shareholder, turned down a board seat, agreed to buy the social networking platform and then started raising doubts about going ahead with the deal. The next chapter in the saga will almost certainly be a legal battle.

Musk argued in a letter to Twitter’s top lawyer that he was ending the deal because Twitter was “in material violation of multiple provisions” of the original agreement, which was signed in April, according to a regulatory filing late Friday.

Musk has raised concerns for weeks, without apparent evidence, that there are more bots and spam accounts on the platform than Twitter has publicly stated. Analysts speculate that the concerns may be an attempt to create a pretext to get out of a deal it may now see as overvalued, after shares in Twitter and the broader tech market have tumbled in recent weeks. Shares in Tesla, which Musk planned to rely on in part to finance the deal, have also fallen sharply since agreeing to the deal.

“Twitter’s board of directors is committed to closing the transaction at the price and terms agreed upon with Mr. Musk and plans to take legal action to enforce the merger agreement,” Twitter chairman Bret Taylor said in a statement. , on Friday, repeating the company’s earlier statements. that he planned to follow through on the deal. “We are confident that we will prevail in the Delaware Court of First Instance.”

Shares of Twitter fell nearly 6% in after-hours trading on Friday immediately after the news, after ending the day down 5%. Tesla stock gained more than 1% in after-hours trading.

Musk in May said the deal was “on hold” as he assessed the number of spam and fake accounts on the platform — a reversal from his earlier statements that he wanted to acquire Twitter to eliminate bots on the platform. Last month, he directly threatened to pull out of the deal, accusing Twitter of breaching the merger agreement by failing to provide the data he says he needed to assess the number of spam and fake accounts on the platform. In response, Twitter agreed to hand over the stream of “firehose” tweets.

But Musk’s lawyer argued in Friday’s letter that Twitter “failed to comply with its contractual obligations” to provide Musk with sufficient data and said Twitter “appears to have made false and misleading statements relied upon by Mr. Musk ” when he agreed to the deal.

“For nearly two months, Mr. Musk sought the data and information needed to ‘make an independent assessment of the prevalence of fake or spammy accounts on the Twitter platform,'” Friday’s letter said. “This information is fundamental to Twitter’s business and financial performance and is necessary to complete the transactions contemplated by the Merger Agreement.”

It continues: “Twitter has failed or refused to provide this information. Sometimes Twitter ignored Mr. Musk’s requests, sometimes denied them for reasons that appear unjustified, and sometimes claimed to comply while providing Mr. Musk with incomplete or useless information.”

This is the developing story. This article will continue to be updated as more information becomes available.

ABC7 Chicago contributed to this report.

& 2022 Cable News Network, Inc., a WarnerMedia company. All rights reserved.

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Elon Musk terminating $44 billion deal to buy Twitter; says social media giant is ‘in material breach of multiple provisions’ Source link Elon Musk terminating $44 billion deal to buy Twitter; says social media giant is ‘in material breach of multiple provisions’

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