The controversial $44 billion offer from Elon Musk to acquire Twitter has been withdrawn.
On Friday, Tesla’s CEO informed Twitter’s board in a letter that the transaction had been terminated.
Twitter, however, is reportedly not going to accept Musk pulling out. Bret Taylor, the board’s chair at Twitter, responded to the criticism by tweeting that the 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. We are confident that the Delaware Court of Chancery will rule in our favour.
Under these conditions, Elon Musk agreed to pay Twitter a $1 billion breakup fee. Instead, it appears Twitter is prepared to put up a battle in order to close the purchase, which the company’s board has approved and CEO Parag Agrawal has adamantly stated he wants to do.
The potential collapse of the agreement is the most recent twist in a story involving the richest man in the world and one of the most powerful social media sites.
The majority of the controversy has taken place on Twitter, where Musk, who has more than 100 million followers, has bemoaned the platform’s failure to fulfil its potential as a forum for free speech.
Twitter’s stock dropped 5% on Friday to $36.81, much below the $54.20 Musk had offered to pay. Tesla’s stock, meanwhile, increased by 2.5 percent to $752.29 per share.
In a letter to Twitter dated Friday, Elon Musk’s attorney Mike Ringler stated that for nearly two months, Musk has been looking for information to assess the incidence of “false or spam” accounts on the social networking site.
“Twitter has failed or refused to provide this information. 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,” said the letter. It added that the data is essential to Twitter’s operations and financial health and is required to complete the merger agreement.
In a conference with journalists and business executives on Thursday, Twitter attempted to provide more clarity on how it determines the number of spam accounts. According to Twitter, 1 million spam accounts are deleted daily.
Well under 5% of its active user base each quarter is made up of spam accounts. Twitter claimed it reviews “thousands of accounts” picked at random, using both public and private data to evaluate whether an account is legitimate, including IP addresses, phone numbers, geolocation, and how the account behaves when it is active, to determine how many accounts are malicious spam.
According to numerous stories at the time, Twitter reportedly gave Elon Musk access to its “firehose” of raw data on hundreds of millions of daily tweets, though neither the business nor Musk verified this.
Ringler further asserted that Twitter violated the contract when it sacked its general manager of consumers and leader of revenue products and announced the layoff of one-third of its talent acquisition staff.
He claimed that the terms of the sale deal obliged Twitter to “seek and obtain consent” before departing from its regular course of operations.
The letter stated that Twitter had to “preserve substantially intact the material components of its current corporate organization.”
Elon Musk started considering purchasing Twitter in late March. At that point, according to Twitter, he allegedly got in touch with the firm’s board members, including co-founder Jack Dorsey.
He informed them that he was buying up shares and was considering either joining the board, taking Twitter private, or founding a rival company.
On April 4, he disclosed in a regulatory filing that he had acquired a 9 percent stake in the company, valued at roughly $3 billion, making him the largest stakeholder.
Twitter initially offered Elon Musk a position on its board. Agrawal tweeted later that Musk would not be joining the board after all six days later.
After that, his proposal to purchase the business came together fast.
Elon Musk had agreed to purchase Twitter for $54.20 per share, adding the number “420” to his bid. To help pay for the purchase, he sold shares in Tesla worth approximately $8.5 billion.
He then increased his commitments from investors by more than $7 billion, including influential figures from Silicon Valley like Oracle co-founder Larry Ellison.
Inside Twitter, confusion and a sharp decline in morale followed Elon Musk’s public criticism of one of the company’s senior attorneys who was engaged in content-moderation decisions.
Twitter executives stopped hiring, stopped discretionary spending and removed two key managers as they got ready for the acquisition to go through.
Additionally, in recent times, Twitter has been firing employees from its talent acquisition department.
