Elon Musk has pulled out of his deal to buy Twitter

Elon Musk is closing in on his $44 billion deal to buy Twitter, according to the billionaire’s filing with the Securities and Exchange Commission on Friday.

Musk’s attorneys filed a letter to Twitter saying he was “terminating their affiliation agreement.” In the letter, Musk argues that he has the right to back out of the deal because Twitter isn’t providing enough information about the company’s business.

Musk’s lawyers accused Twitter of “failing or refusing” to allow Musk and his team to identify the true number of bots or spam accounts on the social media site.

“At times Twitter has ignored Mr. Musk’s requests, at other times it has denied them for reasons that appear to be unreasonable, and at times it has said it will comply when Mr. Musk provides incomplete or unusable information,” the letter states.

Elon Musk’s deal to buy Twitter is in jeopardy

Twitter Chairman Brett Taylor tweeted on Friday that the company would take legal action against Musk.

“Twitter’s board remains committed to completing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement,” he wrote. “We are confident that we will prevail in the Delaware Court of Chancery.”

Legal experts say Musk can’t walk away from the deal. His April agreement to buy the company included a commitment to go through with the acquisition unless there was a major change in the business, and legal experts say nothing has happened to meet that threshold. Musk has previously threatened to pull out of the deal if Twitter doesn’t Give him more data to run his own analysis of how many spam bots it has, while Twitter said it can’t give up personal information like its users’ names, emails and IP addresses. Bot numbers.

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Musk did not immediately respond to requests for comment.

Read the letter Musk’s lawyers filed to stop the $44 billion Twitter deal

In the letter, Musk accused Twitter of violating terms of the contract, making “false and misleading” representations, and cited the possibility of a “material adverse effect” that would affect the company’s value.

“In short, despite his repeated, detailed clarifications intended to facilitate Twitter’s identification, collection and disclosure of the most relevant information requested in Mr. Musk’s original requests, Twitter has not provided the information requested by Mr. Musk for nearly two months,” the letter said.

In the letter, Musk also cited the company’s finances as a possible reason for pulling out of the deal, citing the company’s “dwindling business prospects and financial outlook” as a separate reason for terminating the deal.

After signing the deal, Musk argued in a letter to the company that Twitter breached an agreement not to significantly change its business. Removal of two senior executives May and Conducts layoffs At its hiring panel in July. Musk said he did not waive his right to exercise due diligence when he signed the deal, and expected Twitter to follow up with more information.

Legal experts have said that when the deal was signed, they agreed to buy the company as is.

Musk rocked the social media world in April when he agreed to buy Twitter for $44 billion. He assembled a large group of co-investors and used his personal wealth to secure the debt necessary to close the deal. But after his acquisition announcement, a global selloff in tech stocks eroded Musk’s own net worth, while his $54 a share purchase price looks like a serious valuation for Twitter.

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Kasthuri skeptics have said he made up the bots argument to find an excuse to get out of what he now sees as a bad deal. Musk himself was aware of Twitter’s spam problem and noted that it was one of the reasons he wanted to buy the company in the first place.

Wall Street has been skeptical that Musk will close the deal for months. Twitter’s stock price is around $37 today, down nearly 30 percent from the $52 it traded on the day it announced its acquisition.

The filing comes after The Washington Post reported on Thursday that the contract is in serious jeopardy, One of the fellow investors, who has not heard from Musk’s team in weeks, spoke on condition of anonymity to discuss sensitive matters, people familiar with the situation said.

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