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Elon Musk Is Out on A Multi-Billion Deal with Twitter
By: Adam Zhang
Elon Musk made a deal to buy Twitter in late April this year. However, a recent plot twist has surprised everybody. Just a few weeks ago, Elon Musk announced that he was backing out of the $44bn deal.
Elon Musk said that he backed out due to Twitter failing to provide sufficient information on the number of spam and bot accounts on the app. Twitter is now threatening to take legal action against Musk. The original agreement included a $1bn break-up fee.
Mr. Musk mentioned two months ago that the deal was “temporarily on-hold” since he was waiting for data on the number of spam and bot accounts present on Twitter. The company claimed that less than 5% of accounts were fake, but Elon Musk asked for evidence. According to a letter filed with the US Securities and Exchange Commission, Musk’s lawyer asserted that Twitter had refused to provide proof.
"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," Mr. Musk’s lawyer said in the letter.
The reason why spam accounts are so important to Musk is that they were intended to change how people interact with the platform, and sometimes, they sent scam links that led to viruses and hacks. Twitter said last Thursday that it removes one million of such spam accounts every day.
Elon Musk thinks that Twitter’s estimate is illegitimate, and he believes up to 20% of Twitter accounts could be fake. After the announcement, Twitter’s shares went down 7%.
After Musk declared that he wanted to pull out of the deal, Twitter replied, saying that they would take the case to court.
"The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk," Twitter chairman Bret Taylor said in a tweet.