It’s official, Elon Musk backs out of Twitter and he might face a lot of legal issues in the near future. Recently we already informed you that Elon Musk Twitter deal might not go through. Tesla and SpaceX CEO is formally attempting to renege on his $44 billion deal to buy Twitter. Musk’s team stated in a document filed on Friday that he was pulling out of the deal because Twitter had violated their contract “materially” and had made “false and misleading” representations throughout discussions.
Elon Musk backs out of Twitter after months of controversy
“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. Twitter has failed or refused to provide this information,” stated Musk’s team.
Since a few weeks after he signed the contract, Musk has been preparing to back out, saying that Twitter issued false statistics regarding the incidence of spam bots on its site. However, it’s not obvious whether Musk can legally back out of the partnership because he doesn’t like that there is spam on Twitter – something he might have looked into before agreeing to the terms of the transaction.
Twitter has gone above and above to demonstrate that it is complying with Musk’s wishes. The business enabled “firehose” access to its service in early June so that Musk could receive and review each tweet as it was being posted. Additionally, the business has consistently made an effort to convince the public that it has spam and bots under control. In May, its CEO posted a lengthy thread on how Twitter decides how many of its users are bots. On Thursday, it informed the media that it was removing more than a million spam accounts daily.
Musk must provide evidence that Twitter violated their contract before he may withdraw the signed document of his own volition. For Twitter shareholders, the transaction offered a potentially lucrative $54.20 per share, up from the $36.81 it ended at today. A $1 billion breakup fee, which will be paid by the responsible party, is also on the line.
Under a merger clause known as “specific performance,” Twitter might file a lawsuit to enforce the agreement. If successful, a Delaware judge might order Musk to purchase the business. Additionally, it might file a claim for compensation.
TWTR stock price
Today’s US premarket price movement for Twitter (NYSE: TWTR) shows a decline in the price of the company following news that Elon Musk’s acquisition of the microblogging platform may be in doubt. Earlier this year, Musk became Twitter’s largest individual owner by purchasing a 9.2 percent interest in the company.
Due to his ownership, Musk was anticipated to be appointed to Twitter’s board of directors. He declined the offer, though, sparking rumors that he is trying to buy the business. Twitter was valued at $44 billion when Musk made an offer to purchase the social media business for $54.20 a share. Currently, a TWTR stock is trading at $34.23 according to MarketWatch.
“I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy. However, since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company,” Musk stated in the SEC filing.
The price of Musk’s bid was a sizable premium over the stock price of Twitter. The board eventually accepted the bid after originally rejecting it and introducing a poison pill to stop it because of the enormous premium that Musk was willing to pay for the business. Check out how Twitter-Elon Musk deal will affect the crypto market for further information.