Elon Musk is threatening to walk out on his $44 billion bid to buy Twitter following the company’s inability to prove spam accounts are less than 5% of the total number of users. He accused Twitter of actively resisting and thwarting his information rights (and the company’s corresponding obligations).
This is the first time Musk is threatening to walk away from the deal in writing having previously aired it on Twitter’s social media platform. The Tesla and SpaceX CEO lawyers made the threat in a letter dated Monday. The letter also included a filing from U.S. SEC. Twitter shares dropped by 5.5% on Monday to $38.13 which is a huge discount price given Elon’s original offer of $54.20 per share.
Earlier in May, Musk said he would put the deal on hold temporarily while waiting for the social media company to provide data on the percentage of its fake accounts. Twitter Chief Executive Parag Agrawal responded to this by saying that the calculations could not be done externally because it will require both public and private information that Twitter cannot share. While also mentioning that most advanced spam campaigns used combinations of humans and automation.
The Twitter sale has an agreement that allows Musk to walk out of the deal if there is a “material adverse effect” caused by the company. Which might be a change that affects Twitter’s business or financial conditions negatively. He could be on the hook for a $1 billion breakup fee if he walks away.
Featured image source: The Whistler NG.
