Maverick Tesla founder Elon Musk has sensationally announced that he was no longer interested in buying Twitter, prompting the microblogging site to warn of legal a battle against the billionaire businessman. This comes days after the tech mogul announced that he was gaining 100 percent control of Twitter for a whopping $44bn. However, the cancellation of the deal means that Musk must now cough up a significant sum to Twitter in what’s known as a ‘break-up’ fee.
In a filing before the US Securities and Exchange Commission, Musk’s representatives accused Twitter of breaching terms of the agreement, adding that the social media platform had made false and misleading representations.
In May this year, Musk had announced that the Twitter deal was kept on hold temporarily pending details supporting the calculation that spam/fake accounts do indeed represent less than 5% of users. This appeared to have irked Musk, who had agreed to acquire 100 percent control of Twitter for $44bn in April this year. The revelation about spam and fake Twitter users came as a shock to the controversial businessman.
In the latest statement, Musk’s representatives said that Twitter had failed to provide data and information requested by the billionaire businessman to enable him to ‘make an independent assessment of the prevalence of fake or spam accounts.’
“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 unusable information,” the statement read.
Break-Up Money That Elon Musk Must Pay
The news of Musk pulling out of the Twitter deal had an adverse impact on the social media company’s share, which fell by 7 percent, well below the $54.20 mark that the businessman had offered to pay for the social media platform in the first place.
Angered by Musk’s spectacular U-turn, Twitter has vowed to take legal action against him. Twitter chairman Bret Taylor tweeted, “The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery.”
Under the deal, Musk is required to pay what’s known as the break-up fee to Twitter if he doesn’t complete the deal. This money is estimated to be $1bn. Musk is believed to have made up his mind up his mind to contest this fee when the matter reaches court.
The development is extremely bad news for Twitter, but this could also end up being a setback to Musk if he loses the court battle.
Musk has been in news for many adverse developments surrounding his personal life. First, his transgender child approached the court to sever ties with him formally by losing the surname ‘Musk.’ Soon, it emerged that Musk had fathered a twin with one of his employees late last year. And now he faces a prolonged court battle with Twitter.