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Elon Musk Doesn’t Want to buy Twitter for 44 billion Dollars Anymore
By: Zhile Chen
The news of Elon Musk, the richest person, deciding to not buy one of the biggest social media platforms is shocking. He had already made a deal with Twitter to buy it for $44 billion in April.
Mr. Musk’s stated reasons for withdrawing from the agreement is because Twitter had not given him enough information about spam and fake accounts.
In response to Mr. Musk’s decision, Twitter says it will turn to legal action to enforce the deal, as “the Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk,” according to a tweet by Bret Taylor, chairman of Twitter, possibly foretelling a complicated legal battle between them.
In May, Mr. Musk asked for data on the number of fake and spam accounts that Twitter had. When Twitter responded that out of all their accounts, they had less than 5% of spam and bot ones, Mr. Musk asked for evidence.
In a letter that is currently filed with the US Securities and Exchange Commission, Mr. Musk’s lawyer wrote that Twitter did not provide the evidence. The lawyer said that that was not the only time Twitter was uncooperative, as the also letter says, “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.”
Because Twitter refused information to Mr. Musk, he wants to cancel the deal. But it will be difficult for him to back out, as he already signed the agreement. So, he will have to provide proof of Twitter breaching their deal. However, this might not be the only reason he is trying to back out.
The stock market price for companies such as Twitter has plummeted these last months, making Mr. Musk’s offer of $44 billion possibly some billion more dollars than Twitter’s worth.
Then there was the impact on his other companies. Ever since he announced that he wanted to buy Twitter, his company Tesla’s share price has dropped.
Mr. Musk also comes across as naïve sometimes with his support of free speech and his goals for Twitter’s operations, which include wanting to loosen the content moderation rules. He might have decided that he took on more than he could handle and try to quit.
As for the banks who funded Mr. Musk, they are pretty keen to see Musk close the deal because while they will lose a profitable payday, if Musk closes the deal, they will still gain a lot of money if he does it from their services.
Unfortunately for Musk, Twitter is not so nonchalant. Twitter has the intention of suing Musk for asking increasingly invasive and unreasonable requests, for backing out because his own wealth had dropped and he wanted to keep what money he had left, and using the spam account percentage as an excuse to cancel the deal.
Even more unfortunately for Musk, courts do not usually rule in favor of buyers, making Musk possibly lose a significant portion of his wealth to something he does not want.