Elon Musk backs out of 44 billion dollar deal to buy Twitter
By: Evan Yang
On April 25, the wealthiest man in the world closed a deal to buy Twitter for $54.20 per share—a stunning $44 billion total. Recently, however, Elon Musk decided to back out of the agreement due to what he claims was a violation of the buyout agreement.
Musk has long been a user on the platform, gaining more than 83 million followers. He has repeatedly said that he wants to transform the app by promoting free speech and user control. By buying the company, he would be able to work on it without prying eyes.
However, in May, Musk suspended the deal after Twitter had not provided him adequate information about spam accounts. He said that the company has made “misleading representations” about the number of spam bots on Twitter. Twitter has had a long-standing problem with these bots, as they spread potentially dangerous misinformation. Twitter has said that it removed approximately a million spam accounts each day. The platform has said that these accounts only make up 8 percent of users, but Musk has said that it could be as many as 20 percent.
Despite this surface-level concern, Musk might have other reasons to pull out of the deal. Shares of both Twitter and Tesla have dropped in price since he offered the deal, making his offer seem high, relative to Twitter’s current value.
If Musk can prove that Twitter has broken the contract, he could both pull out of the deal and receive a billion dollars. There is also a performance provision that allows Twitter to force Musk to fulfill the agreement. Twitter has said that they will take legal action over this incident.