Elon Musk Has Threatened To Renege On Twitter Deal.
Elon Musk in a letter to Twitter’s head of legal has stated that he is reconsidering his deal to buy twitter owing to the fact that he believes the company is withholding accurate information about the number of spam and fake accounts on the site.
In the letter, his attorney accuses Twitter of breaching the merger agreement by not giving him accurate information that the deal states he has a right to.
This development follows directly after Musk took to Twitter less than a month ago to announce that the deal was on hold due to the same issue.
Earlier this year, on April 14, Elon Musk took to Twitter to announce his plans to buy the social media platform citing its failure to enforce freedom of speech and his apparent desire to change the site for the better.
Timeline on acquisition
Musk’s plans to acquire Twitter apparently began in January 2022, when he purchased shares of the company without knowledge of the general public. On March 14 he had bought up to 5% of Twitter shares but didn’t disclose any info about it. However, on March 24, Musk began to make tweets directed at Twitter concerning freedom of speech and went on to make polls, asking his followers if they thought twitter provided a space for freedom of speech.
After a meeting with the former CEO of Twitter Jack Dorsey to discuss the “future of social media” and Twitter heads meeting about Musk and wanting him to agree to a deal, where statements he would make about the company were limited, on April 4, it was revealed that Elon Musk was the largest shareholder of Twitter which drove up shares.
Twitter was in talks with Musk for him to join the board which he agreed to and in a letter addressed to Twitter employees, current twitter CEO, Parang Agrawal announced that Elon Musk had joined the board. This meant that Musk couldn’t buy shares for more than 14.9%.
On April 10, Musk dropped out of the board which allowed him to tweet as much as he wanted about the company and gave him the opportunity to buy as many shares as he wanted.
He then announced on April 14, his plans to buy Twitter for $41.4bn citing his desire to promote free speech but said it couldn’t be done unless Twitter was privately owned.
However, Twitter’s board of directors devised a short-term shareholder rights plan which would prevent Elon Musk from acquiring the company. After Musk revealed that he had yet to receive a formal response, the company agreed to sell to him on April 25.
In the next few days, a few executives from Twitter were laid off, there was a temporary hold on Twitter, Elon Musk sold Tesla stock and announced his decision to un-ban former US President Donald Trump from Twitter, as part of his quest to promote free speech.
However, on May 13, Musk tweeted that the deal was on hold as he didn’t believe twitter’s claims that the number of spam and fake accounts made up only about 5% of users. Musk’s announcement led to Twitter shares dropping more than 10%. Later Musk announced that he still had plans to buy the company.
On May 14, Elon Musk tweeted that Twitter’s legal team had accused him of breaking an NDA, when he stated that the sample size twitter used to determine the number of spam and fake accounts was 100.
On May 17, in a series of tweets between Musk and the CEO, Agrawal, the CEO explained the steps twitter was taking to reduce the number of spam and fake accounts. But Musk only responded with a poop emoji and later asked how advertisers knew they were getting for their money.
On May 17, Elon Musk announced that the deal couldn’t move forward claiming that he believed that the number of fake and spam accounts made up 20% of users and not 5% as Twitter claimed. Twitter however stated that the deal was still moving forward.
On June 6, Elon threatened to rescind his decision to buy the company. Elon’s dropping out of the deal would lead to a fine of about $1bn.
