Elon Musk terminates deal to buy Twitter, microblogging platform vows legal action
The Tesla CEO said that he took the decision as Twitter did not provide enough information about the number of spam and fake accounts on its platform.
Tesla Chief Executive Officer Elon Musk on Friday said that he was terminating a deal to buy Twitter, claiming that the microblogging platform breached the agreement on multiple counts.
Musk said that he took the decision as Twitter did not provide enough information about the number of spam and fake accounts on its platform.
On April 26, the microblogging platform had said in a regulatory filing that Musk will buy Twitter for about $44 billion (over Rs 3,36,910 crore).
However, on May 13, Musk had tweeted that the deal was on hold “pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users”.
In response to the Tesla CEO’s announcement on Friday, Twitter Chairman Bret Taylor said that the company plans to pursue legal action to enforce the merger agreement. “The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk...” he said.
Musk’s lawyers said in a regulatory filing to the United States stock exchanges that Twitter failed to respond to repeated requests for information about fake or spam accounts on its platform. It also did not provide information about its processes for identifying and suspending such accounts, the lawyers claimed.
“Mr. Musk is terminating the Merger Agreement because Twitter is in material breach of multiple provisions of that Agreement, appears to have made false and misleading representations upon which Mr. Musk relied when entering into the Merger Agreement...” the Tesla CEO’s lawyers said in a letter to Twitter’s Chief Legal Officer Vijaya Gadde.
Musk, the world’s richest man, had earlier said in a regulatory filing that Twitter had declared that less than 5% of its daily active users were spam or fake accounts.
Musk, however, claimed that the actual number of spam and fake accounts could be 20%, or four times of what Twitter has declared. He added that Twitter Chief Executive Officer Parag Agrawal refused to show proof that less than 5% of the platform’s users were fake.