Twitter threatens to sue as Elon Musk pulls out of $44 billion deal to buy company
Elon Musk is abandoning his $44 billion (£36.5 billion) takeover of Twitter, alleging that the social media company had failed to provide enough information about the number of fake and spam accounts on its platform.
Mr Musk, the world’s wealthiest person, first agreed to buy the platform in April, promising to revive its "free speech" potential, but announced the takeover was "temporarily on hold" less than a month later.
Twitter says it plans to sue the Tesla CEO to uphold the deal, laying the groundwork for a lengthy legal battle.
Bret Taylor, Twitter’s chair, said the company was “committed to closing the transaction on the price and terms agreed upon” and planned "to pursue legal action to enforce the merger agreement."
The merger agreement includes a £1 billion break-up free.
Mr Musk’s lawyer said his client had spent two months seeking data to assess the number of fake or spam accounts on the social media platform.
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“Twitter has failed or refused to provide this information," he wrote in a letter to Twitter’s board
"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."
Twitter maintains that fake accounts make up less than 5% of its total users. On Thursday, the company said it removed around one million spam accounts every day.
On Friday, shares in Twitter fell by 5% to $36.81, far below what Mr Musk had agreed to pay.
The announcement is the latest twist in the long running saga between one of the world’s best-known entrepreneurs and the social media giant.
Mr Musk revealed he had become Twitter’s largest shareholder in April, after acquiring a 9% stake worth around $3 billion (£2.49 billion).
The SpaceX chief executive sold roughly $8.5 billion (£7 billion) worth of shares in Tesla to help fund the purchase and raised more than $7 billion (£5.8 billion) from investors.
The two sides later become embroiled in a public row over the number of fake accounts on the platform.
In April, Mr Musk wrote on Twitter: "If our twitter bid succeeds, we will defeat the spam bots or die trying!"
Much of the drama surrounding the deal has played out on Twitter, with Mr Musk - who has more than 100 million followers - lamenting that the company was failing to live up to its potential as a platform for free speech.
Groups opposed to Mr Musk’s takeover of Twitter - including those advocating for women, minorities, and LGBTQ people - welcomed Friday’s news.
“Despite what Musk may claim, this deal isn’t ending because of Twitter bots or spam accounts," said Angelo Carusone, president of Media Matters, a left-leaning non-profit watchdog.
"This deal is collapsing because of Elon Musk’s own erratic behaviour, embrace of extremists and bad business decisions.”
Dan Ives, a financial analyst, said the move was "a disaster scenario for Twitter and its board" and predicted a long court battle, with Twitter fighting either to push through the deal or to ensure it receives the $1 billion (£830 million) termination fee from Mr Musk.