Dimitrios Kambouris via Getty ImagesElon Musk, here at the Met Gala in New York, May 2, 2022.
TWITTER – For some it’s the end of a dream, for others a nightmare: Elon Musk, the head of Tesla and SpaceX, this Friday, July 8, ended the agreement to buy the social network Twitter for $44 billion.
In a letter released by the American Stock Exchange Commissioner, his lawyers assert that Twitter has failed in its commitments under the agreement, notably by not providing all the requested information on the number of inauthentic accounts and spam.
“Twitter failed to comply with several terms of the agreement and appears to have provided false and misleading information on which Mr. Musk relied in entering into the acquisition agreement,” the official letter said.
Twitter has repeatedly stated over the past few weeks that the number of fake accounts on its platform is less than 5%. The multi-billionaire and his team believe the network is lying and that it is hurting the profitability of his business and, in turn, the company’s value.
Experts have been debating for weeks whether Elon Musk wanted to withdraw his offer or renegotiate the price lower.
By ending his pledge to buy Twitter, the businessman faces significant court action. Both parties have agreed to pay up to $1 billion in severance, subject to certain circumstances.
The platform’s Chairman of the Board of Directors (CA), Bret Taylor, also tweeted that the CA “is committed to completing the transaction at the agreed price and terms” and intends to prevail in court.
Twitter’s board of directors is committed to completing the transaction at the price and terms agreed with Mr. Musk and plans to take legal action to enforce the merger agreement. We are confident that we will prevail in the Delaware Court of Chancery.
—Bret Taylor (@btaylor) July 8, 2022
All losers
“This is a grim scenario for Twitter and its board as the company now faces Musk in a protracted legal battle to salvage the deal and/or get at least $1 billion back,” said analyst Dan Ives.
In the letter, Elon Musk’s lawyers also discuss the recent firings of Twitter employees and the hiring freeze.
They clearly “listed as many reasons as possible to avoid paying the fine,” commented analyst Carolina Milanesi for AFP.
On April 25, Elon Musk appeared to have won his bet, despite initial attempts by Twitter to push him away.
After gradually and discreetly increasing the group’s capital, he entered into a definitive agreement with the group’s CA to purchase the social network at a price of $54.20 per share, or $44 billion in total.
Since then, the Twitter title has lost more than a quarter of its value. Tesla stock also plunged nearly 25% during that time.
But even if the social network seems weakened by the many adventures of the last few months, “the worst thing would be if Twitter forced the takeover”, notes Carolina Milanesi.
“You would end up with an owner who doesn’t want the business and is filled with resentment.”
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