In early July, Elon Musk, the CEO of Tesla, backed out of a $44 billion agreement to purchase Twitter. He decided to terminate the deal because Twitter did not provide enough information on the number of spam and fake accounts registered to the network.
In May, Musk put negotiations on hold as he awaited evidence to prove that the social media platform had less than 5% of spam and fake account users out of the total number of users.
In a filing, Elon Musk said he was declined information regarding this issue many times which is why he terminated the contract.
“Twitter has not provided information that Mr. Musk has requested for nearly two months notwithstanding his repeated, detailed clarifications intended to simplify Twitter’s identification, collection, and disclosure of the most relevant information sought in Mr. Musk’s original requests,” the filing stated.
As a result, Twitter chairman Bret Taylor responded in a tweet, “The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery.”
On July 7th, Twitter announced their removal of around 1 million bot accounts each day. Because of this, Elon Musk believes that the actual percentage of spam and fake accounts adds up to around 20% of all Twitter users. After the announcement, Twitter’s shares fell by 7% in extended trading.
Elon Musk claimed Twitter’s withholding of the number of bot accounts to be a breach of contract. However, many spectators believe that the spat over these bot accounts is an excuse for Musk to back away from the agreement without having to pay the repercussions.
“If he were really concerned about the bot info, he’d sue,” said Ann Lipton, a law professor at Tulane University. “It seems more likely that it’s not really about that. Instead, he wants to claim Twitter is in breach of contract, so he doesn’t have to close.”
Link to articles:
https://www.bbc.com/news/business-62102821
https://www.nbcnews.com/business/business-news/elon-musk-twitter-cancel-purchase-deal-rcna32211
In May, Musk put negotiations on hold as he awaited evidence to prove that the social media platform had less than 5% of spam and fake account users out of the total number of users.
In a filing, Elon Musk said he was declined information regarding this issue many times which is why he terminated the contract.
“Twitter has not provided information that Mr. Musk has requested for nearly two months notwithstanding his repeated, detailed clarifications intended to simplify Twitter’s identification, collection, and disclosure of the most relevant information sought in Mr. Musk’s original requests,” the filing stated.
As a result, Twitter chairman Bret Taylor responded in a tweet, “The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery.”
On July 7th, Twitter announced their removal of around 1 million bot accounts each day. Because of this, Elon Musk believes that the actual percentage of spam and fake accounts adds up to around 20% of all Twitter users. After the announcement, Twitter’s shares fell by 7% in extended trading.
Elon Musk claimed Twitter’s withholding of the number of bot accounts to be a breach of contract. However, many spectators believe that the spat over these bot accounts is an excuse for Musk to back away from the agreement without having to pay the repercussions.
“If he were really concerned about the bot info, he’d sue,” said Ann Lipton, a law professor at Tulane University. “It seems more likely that it’s not really about that. Instead, he wants to claim Twitter is in breach of contract, so he doesn’t have to close.”
Link to articles:
https://www.bbc.com/news/business-62102821
https://www.nbcnews.com/business/business-news/elon-musk-twitter-cancel-purchase-deal-rcna32211
