Musk's plans to buy Twitter have been more or less doomed from the start, and the negotiations have been punctuated with drama.
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Elon Musk has sensationally announced that he's terminating his $44 billion takeover of Twitter.
The billionaire claims that the social network has violated multiple provisions of their agreement.
Tesla's CEO has frequently complained about the number of spam accounts on Twitter — claiming the true figure is higher than what the social network suggests.
And only yesterday, a report from The Washington Post had claimed the takeover was in peril, with Musk set to take "potentially drastic action."
Musk's plans to buy Twitter have been more or less doomed from the start, and the negotiations have been punctuated with drama.
What's awkward is that the terms of the deal mean that Musk waived certain due diligence rights, and it's very possible that he could be on the hook for a $1 billion fee because of the termination.
Twitter has repeatedly said that it's determined to see the deal through, with critics claiming Musk has gotten cold feet because the company's stock has fallen substantially of late.
While he had proposed a takeover at $54.20 a share, Twitter's currently trading at $34.65 — with stock plunging 5.67% in after-hours trading after Musk's shock exit emerged.
A letter to Twitter's chief legal officer Vijaya Gadde states that the company "appears to have made false and misleading representations upon which Mr Musk relied when entering into the Merger Agreement."
He doubled down on claims that Twitter has not complied with a contractual obligation to provide all data and information "for any reasonable purpose related to the consummation of the transaction" — despite two months of attempts.
Specifically, he's talking about the "prevalnce of fake or spam accounts," adding:
"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."
The billionaire's legal team said he was determined to figure out how the prevalence of spam accounts relates to Twitter's number of monetizable daily active users.
It's also alleged that a number of letters were filed to request further information — but the tech giant is accused of being "non-responsive," with his lawyers claiming this gives him the right to terminate their agreement.
They went on to claim that "it appears that Twitter is dramatically understating the proportion of spam and false accounts on their platform" — and that the true figure is "wildly higher" than 5%. And damningly, it is claimed:
"Twitter includes accounts that have been suspended — and thus are known to be fake or spam — in its quarterly mDAU count even when it is aware that the suspended accounts were included in mDAU for that quarter."
Twitter is yet to comment on this breaking news.
