Elon Musk warned Monday that he could walk away from his $44 billion offer to acquire Twitter Inc if the social media network fails to provide data on spam and fake accounts.
In a letter to Twitter, the billionaire reiterated his request for details on the bot accounts, saying he reserved all rights to end the merger because the company was in “clear material breach” of its obligations by not providing information to them. .
Shares of Twitter fell 5.6 percent to $37.92 and were trading at a steep discount to Musk’s $54.20 a share, suggesting investors didn’t expect the deal to close at the agreed-upon price. They were down 2.7 percent last time.
“Twitter has and will continue to share information with Musk to ensure the transaction is completed in accordance with the terms of the merger agreement,” the company said in a statement.
Reading, Elon Musk and Twitter Buyout
Twitter said that Musk “temporarily halted” the deal in mid-May and said he would not proceed with the offer until Twitter shows evidence that spam bots account for five percent of its total users. eat less.
Since then, the acquisition saga has had several twists and turns, raising questions about Musk’s intentions to complete the deal at the set price.
Although Musk has used social media platforms extensively to air his views on the deal and the company, this is the first time he has formally threatened to walk away.
Dennis Dick, a proprietary trader at Bright Trading LLC, said, “It’s quite clear that he has buyer’s remorse and is trying whatever he can to bring down the price, and I think he can be successful.” “
“You can see the selloff in social media shares and they realized they overpaid” […] All these are just gimmicks to bring down the price.”
Musk has questioned the accuracy of Twitter’s public filings about spam accounts, claiming they must be at least 20 pc of the user base.
Twitter disagrees, with chief executive Parag Agarwal providing details on how the company handles spam accounts in his recent tweets.
A self-proclaimed free-speech absolutist, Musk has said that one of his priorities will be to remove “spam bots” from the platform.
The CEO of Tesla Inc. owns 9.6 PCs of Twitter and has over 95 million followers on the network.
As part of the deal, Musk is contractually obligated to pay breakup charges worth $1 billion – a slice of his fortune worth an estimated $219m Forbes If he doesn’t complete the deal.
Twitter could sue for “distinctive performance” to force Musk to complete the deal and obtain a settlement from him as a result.
In his letter, Musk said he needed the data to conduct his own analysis of Twitter users and did not believe in the company’s “loose testing method”.
“He’s trying to walk away from the Twitter deal, this is the first shot across the bow,” said Wedbush analyst Dan Ives.
Musk has lined up a number of high-profile investors for the deal, including Saudi Arabian investor Prince Alwaleed bin Talal and Sequoia Capital.