Writing a mega twist in his story of acquiring Twitter, Elon Musk has upended the script by announcing that he has decided to relinquish the $44 billion deal to buy the micro-blogging site. The unanticipated move from the world's richest man has put Twitter in turmoil and the company has vowed that it would sue Musk to keep the deal on the table.
Musk has said that Twitter's failure of disclosing the details of spam and fake accounts on the platform was the reason why he has decided to forgo the deal. In a letter to Twitter's board, Musk's lawyer Mike Ringler complained that his client had for nearly two months sought data to judge the prevalence of fake or spam accounts on the social media platform.
The letter has further said, "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 unstable information." Musk has also said that the information is fundamental to Twitter's business and financial performance, and is needed to finish the merger.
Dismayed by Musk's decision, Twitter has countered the letter with an assertion that it plans to pursue legal action to enforce the merger agreement. In response, the chair of Twitter's board, Bret Taylor, tweeted that the board is committed to closing the transaction on the price and terms agreed upon with Musk and plans to pursue legal action to enforce the merger agreement. Taylor said, "We are confident we will prevail in the Delaware Court of Chancery."
According to PTI, Twitter could have pushed for a $1 billion breakup fee that Musk agreed to pay under these circumstances. Instead, it looks ready to fight to complete the purchase, which the company's board has approved and CEO Parag Agrawal has insisted he wants to consummate. With over 100 million followers, Musk crafted a deal to acquire Twitter completely by claiming that the social media giant was failing to live up to its potential as a platform for free speech.
Musk announced the deal in April and last month, Twitter offered Musk access to its fire horse of raw data on hundreds of millions of daily tweets in the midst of no confirmation from either side about such access. Musk has expressed his interest in acquiring Twitter to add value to the business by curbing its spam bots. However, this issue has now become the reason why Musk has decided to curb the deal itself.
In the recent development, Musk's lawyer has alleged that Twitter has breached the agreement when it fired its revenue product leader and general manager of consumers and laid off a third of its talent-acquisition team. When the deal was unfolding, Twitter had offered a seat on its board to Musk. However, days later, Twitter CEO Parag Agrawal said that Musk will not be joining the board and following the announcement, Musk came out and expressed his desire to bring Twitter under his empire.
Musk had agreed to buy Twitter for $54.20 per share and he sold 8.5 billion worth of shares in Tesla to help fund the purchase. He then strengthened his commitments of more than 7 billion from a diverse group of investors including bigheads like Larry Ellison, the co-founder of Oracle. Months after venturing to acquire Twitter, Musk has now come up with the mind to divorce Twitter by seeking to relinquish the deal, only to be caught in a tumultuous wave of controversy and legal trouble.