Billionaire Tesla CEO Elon Musk is seeking to abandon his $44 billion deal to buy Twitter after claiming in a regulatory filing yesterday (8 July) that the social media company breached multiple provisions of an agreement signed in April, but Twitter execs have vowed to see him in court.
The filing letter, which was addressed to a Twitter lawyer, stated the social media platform was “in material breach of multiple provisions” of the merger agreement Musk struck with Twitter.
Specifically, Musk’s lawyer alleged in the letter that Twitter has “not complied with its contractual obligations” to provide him with sufficient data related to the number of spam bots on the social media platform.
The letter further stated that Twitter “appears to have made false and misleading representations upon which Mr. Musk relied” when the deal was struck.
“For nearly two months, Mr. Musk has sought the data and information necessary to ‘make an independent assessment of the prevalence of fake or spam accounts on Twitter’s platform,” the letter stated.
While Musk has long speculated that Twitter has more bots and spam on its platform than it had publicly stated, many have viewed his allegations as a means to get out of the deal he negotiated when the company’s shares were trading at a higher price.
Musk could have faced a $1 billion break-up fee, but for now it looks as though Twitter executives plan to see him in court.
“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,” Twitter board chair Bret Taylor said on Twitter today, which reaffirmed earlier statements by the company that it planned to follow through with the deal. “We are confident we will prevail in the Delaware Court of Chancery”.
Twitter conducted a virtual meeting with reporters yesterday (7 July) morning to explain how it determined which of the accounts on its platform were bots or spam accounts.
The company has long maintained that less than 5 per cent of its monetisable daily active users (mDAUs) each quarter were spam accounts, according to a story by US news site CNBC.
Despite being a big Twitter user, Musk hadn’t tweeted about his attempt to end the deal as of 8 July.