Elon Musk Terminates $44-Billion Twitter Deal

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Elon Musk has withdrawn from his $44 billion deal to buy Twitter, casting doubt on the social media company’s immediate future.

Musk accused Twitter in a securities filing Friday of lying about the number of bots and spam accounts on the platform, as well as failing to provide material he requested. This includes detailed data on the number of bot and spam accounts on Twitter, the company’s methodology for calculating user numbers, and supporting documentation detailing its financial valuation.

“This information is fundamental to Twitter’s business and financial performance and is required to complete” Musk’s buyout, according to the letter. “Twitter has either failed to provide this information or has refused to do so. Twitter has sometimes ignored Mr. Musk’s requests, sometimes rejected them for reasons that appear to be unjustified, and sometimes claimed to comply while providing Mr. Musk with incomplete or useless information.”

According to the letter, despite Twitter’s alleged stonewalling, Musk’s advisors analyzed the number of bots on the platform and determined that Twitter lied about their prevalence.

According to the letter, the true number of bots on the platform “is wildly higher than 5%,” citing “[p]reliminary analysis by Mr. Musk’s advisors of the information provided by Twitter to date.”

For as long as Twitter has been a public company, it has maintained that less than 5% of users are spam or fake accounts.

Musk stated in the letter that he notified Twitter of the lapses on June 6, implying that the company’s time to provide the information he requested has now expired.

Twitter has threatened to sue

Bret Taylor, Twitter’s board chair, stated that the company would take legal action to force Musk to complete the sale.

“The Twitter Board is committed to closing the transaction at the agreed-upon price and terms with Mr. Musk and intends to pursue legal action to enforce the merger agreement,” Taylor said on Twitter.

Twitter’s board of directors approved the buyout two weeks ago.

Musk is liable for a $1 billion termination fee under the acquisition agreement if the deal falls through.

A month long saga

The abrupt withdrawal of the deal by Tesla’s mercurial founder is the latest twist in a months-long drama pitting the world’s richest person against a globally influential internet company. The contest was largely played out on Twitter, with each side vying for leverage by strategically releasing information on the platform.

Musk has publicly chastised Twitter over the number of bots on the platform, a long-standing irritant for the social media celebrity with over 100 million followers. Musk has also publicly criticized Twitter’s message-posting practices and policies, describing the platform as an important forum for free speech in his bid for the company and implying that once he owns Twitter, he will reverse its ban on former President Donald Trump.

Many technology analysts believe Musk’s public reservations about Twitter’s solvency — after entering into a binding agreement to buy it — were a negotiating ploy to get a better deal on Twitter. Musk made his initial buy offer in April, just as the stock market began its long decline, reducing the value of both Twitter and Musk’s personal fortune, much of which is in Tesla stock.

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