Tesla founder and the world’s richest person, Elon Musk, has decided to terminate the $44 billion deal to buy Twitter, accusing the company of "misleading" statements about the number of fake accounts.
Elon Musk's lawyers said in a regulatory filing that witter had failed to respond to multiple requests for information on fake or spam accounts on the platform, which is fundamental to the company's business performance.
However, Twitter chairman Bret Taylor said: "The Twitter 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,"
Twitter's Chairman @btaylor has said that the board plans to pursue legal action against Tesla CEO @elonmusk after he pulled out of the $44 billion deal#Twitter and Musk both agreed in April that if a party chose to withdraw from the deal, they would have to pay a fine of $1 bn pic.twitter.com/KFkgz00LwC
— INDIA NARRATIVE (@india_narrative) July 9, 2022
The terms of the deal require Elon Musk to pay a $1 billion breakup fee if he does not complete the transaction.
Musk had said in May that he was putting the deal on hold until the social media company provided details to back its claim that spam or fake accounts constitute less than five per cent of its active users.
Last month, he warned Twitter that he might withdraw from the deal if the social media platform fails to provide the data on spam and fake accounts.
Twitter then offered Musk access to its raw data on hundreds of millions of daily tweets. Twitter said such private data helps avoid misidentifying real accounts as spam.
Twitter has maintained that no more than five per cent of accounts are run by software instead of people, while Musk has said he believes the number to be much higher.
Interestingly, one of the reasons Elon Musk cited for his interest in buying Twitter was that he wanted to add value to the business by getting rid of its spam bots. This is the same problem that he's now citing as a reason to end the deal.
Elon Musk had vowed to restore free speech on the micro-blogging platform. "I hope that even my worst critics remain on Twitter because that is what free speech means," he tweeted in April as he finalised the $44 billion deal to takeover Twitter.