Elon Musk Pulls Out of Twitter Deal
By: Nicholas Huang
Elon Musk decided to buy Twitter in April, but he pulled out of the deal because Twitter failed to provide information on the amount of spam/fake accounts. However, Twitter is determined to land this deal with Elon Musk; they plan on pursuing legal actions to enforce the deal.
Elon Musk put the deal on hold in May when he requested evidence that spam accounts made up less than five percent of the Twitter user base. Twitter failed to provide any information, according to Musk's lawyer.
Instead, "...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", according to a letter filed with the US Securities and Exchange Commision by Musk’s lawyer.
Elon Musk estimates that bot accounts could make up 20% or more of the Twitter user base. In fact, Twitter removes up to a million fake accounts per day, according to BBC News. Musk also has other reasons to withdraw from the deal.
Musk might have offered too much for Twitter. The deal was also having potential effects on his other companies; when he announced he was going to buy Twitter, Tesla’s shares fell significantly. Because of Twitter’s failure to provide data about fake accounts and possible impact to his other companies, Musk ultimately is withdrawing from the Twitter deal.