Elon Musk pulls out of $44bn deal to buy Twitter
Elon Musk is attempting to halt his $44 billion (£36 billion) purchase of Twitter, claiming many violations of the contract.
The announcement follows the world’s richest person’s decision to purchase Twitter in April as the most recent twist in a protracted saga.
Mr. Musk claimed that the reason for his withdrawal was that Twitter had not given sufficient details regarding the quantity of spam and false accounts.
Twitter claims that the contract will be enforced through the legal system.
Twitter CEO Bret Taylor laid the groundwork for what might develop into a protracted legal battle when he stated, “The Twitter Board is dedicated to completing the transaction at the price and terms agreed upon with Mr. Musk.”
The original merger deal specifies a $1 billion (£830 million) break-up cost.
The deal was “temporarily on stop,” according to Mr. Musk, in May, as he awaited details on the volume of spam and fake Twitter accounts.
The wealthy billionaire disputed the company’s assertion that fewer than 5% of its users are spam and bot accounts and sought proof.
In a letter to the US Securities and Exchange Commission, Mr. Musk’s lawyer alleged that Twitter had either withheld or refused to furnish this information.
To spread information to a big audience and affect how they use the network, spam accounts are created. On Thursday, Twitter asserted that it removes almost 1 million such accounts every day.
Mr. Musk thinks that up to 20% of Twitter users are likely to be spam or automated accounts.
Following the news, Twitter’s stock dropped by 7% in after-hours trade.
Elon Musk, the CEO of Tesla and the inventor of the rocket business SpaceX, is rumoured to be the richest man in the world.
He had pledged, as a self-described “free speech absolutist,” to ease Twitter’s content restrictions as soon as he bought the company. For blocking several accounts, including the one belonging to former US President Donald Trump, he has long criticised Twitter.
He has also requested more clarity in the process that allows some tweets to be promoted and sent to larger audiences on the website.