Following Twitter’s failure to give sufficient details about the number of phoney accounts, Elon Musk stated Friday that he will withdraw his contentious $44 billion offer to purchase the social media platform. The Tesla CEO would be sued by Twitter to enforce the agreement, it responded right away.
The potential collapse of the deal was only the most recent development in a tale between the richest man in the world and one of the most powerful social media platforms, and it may signal the beginning of a protracted court struggle.
Under these conditions, Musk may have agreed to pay Twitter a $1 billion breakup fee. Instead, it appears prepared to go to great lengths to complete the acquisition, which the company’s board has approved and which CEO Parag Agrawal has adamantly stated he wants to complete.
Musk’s attorney Mike Ringler complained in a letter to Twitter’s board that his client had been looking for information on the frequency of “fake or spam” accounts on the social media site for over two months.
Much of the turmoil around the acquisition was expressed on Twitter, where Musk, who has more than 100 million followers, bemoaned Twitter’s underperformance as a free speech site.
Twitter’s stock dropped 5% on Friday to $36.81, much less than the $54.20 Musk agreed to pay. Tesla’s stock, meanwhile, increased by 2.5 percent to $752.29 per share. Twitter’s stock kept falling after the market closed and Musk’s letter was made public, while Tesla’s stock increased.
In a conference with journalists and business leaders on Thursday, Twitter attempted to provide more clarity on how it determines the number of spam accounts. According to Twitter, 1 million spam accounts are deleted daily. The accounts make up much less than 5% of its active user base each quarter. Twitter said it checks “thousands of accounts” picked at random, utilising both public and private data to assess whether an account is legitimate, including IP addresses, phone numbers, location, and account behaviour while active, to compute how many accounts are harmful spam.
According to many stories at the time, Twitter reportedly gave Musk access to its “fire hose” of raw data on hundreds of millions of daily messages last month, though neither the business nor Musk verified it.
One of the main justifications Musk provided for his interest in taking Twitter private was his conviction that he could add value to the company by eliminating its spam bots, the same issue he is now claiming as justification for terminating the agreement.
Additionally, Musk’s attorney claimed that Twitter violated the agreement when it let go of two senior managers and reduced the size of its talent acquisition team by one-third. He said that the terms of the selling deal obliged Twitter to “seek and gain approval” before departing from its regular course of operations. The letter stated that Twitter has to “maintain substantially intact the material components of its present corporate organisation.”
Musk appears to start considering purchasing Twitter in late March. At that point, according to Twitter, he allegedly got in touch with the firm’s board members, including co-founder Jack Dorsey, and informed them that he was buying up shares and was considering either joining the board, taking Twitter private, or founding a rival business.
Then, on April 4, he disclosed in a regulatory filing that he had acquired a 9 percent interest in the firm, valued at roughly $3 billion, making him the largest stakeholder.
Twitter first offered Musk a position on its board. Six days later, though, Agrawal tweeted that Musk would not, in fact, be joining the board.
After that, his acquisition proposal for the business rapidly came together.
Musk added a marijuana allusion to his pricing when he agreed to purchase Twitter for $54.20 per share. To help pay for the purchase, he sold shares in Tesla valued around $8.5 billion. He then increased his pledges from investors by more than $7 billion, including influential figures from Silicon Valley like Oracle co-founder Larry Ellison.
When Musk made his offer to Twitter, it caused uncertainty and a decline in morale, especially after Musk had publicly criticised one of the company’s senior attorneys who was in charge of making content-moderation decisions.
groups that opposed the takeover from the beginning, including as those that support women, minorities, and LGBTQ individuals, applauded the announcement on Friday.
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