Monday, August 8, 2022
HomeBusinessElon Musk Pulls Out of $44bn Deal to Buy Twitter

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 news follows the world’s richest person’s decision to purchase Twitter in April as the most recent twist in a protracted drama.

Mr. Musk claimed that the reason for his withdrawal was that Twitter has not given sufficient details on the quantity of spam and false accounts.

According to Twitter, legal action will be taken to enforce the contract.

Twitter CEO Bret Taylor tweeted, “The Twitter Board is committed to complete the acquisition on the price and terms agreed upon with Mr. Musk,” laying the stage for what may become a prolonged court fight.

A $1 billion (£830 million) break-up fee is stipulated in the original merger agreement.

In May, Mr. Musk stated that the agreement was “temporarily on pause” as he awaited information on the quantity of spam and false Twitter accounts.

The company’s claim that less than 5% of its users are spam and bot accounts was challenged by the wealthy businessman, who demanded proof.

Mr. Musk’s attorney said in a letter sent to the US Securities and Exchange Commission that Twitter had either failed to give or refused to supply this information.

The letter states that Twitter has “at times disregarded Mr. Musk’s requests, at times rejected them for reasons that appear to be unjustifiable, and at other times pretended to comply while providing Mr. Musk with inaccurate or incomplete information.”

Spam accounts are made to disseminate information to a big audience and influence how they use the site. Twitter said on Thursday that it eliminates around 1 million such accounts daily.

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.

The CEO of Tesla and the inventor of the rocket business SpaceX, Elon Musk is rumored to be the richest man in the world.

As a self-described “free speech absolutist,” he had promised to relax Twitter’s content control policies as soon as he acquired the business.

He has long criticized Twitter for blocking some accounts, like the one belonging to former US President Donald Trump.

Additionally, he has asked for greater transparency in the mechanism that permits select tweets to be promoted and sent to larger audiences on the site.

Bob Carlson
Bob Carlson
Bob Carlson is a business journalist, with over a decade of experience in the trenches of reporting up-to-date business news for publications all over the world. With a wealth of knowledge at his back, Bob strives to bring the most important insights into the business world for TheOptic daily.
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