Elon Musk Walks Away from $44 Billion Twitter Deal
By: Nina Gupta
On Friday, Elon Musk abandoned his deal to buy Twitter, stating that the company didn’t provide enough information on the number of span accounts on the app. Musk said that he believes the number of spam accounts on Twitter are far greater than the 5% that Twitter publicly reported.
In late April, Elon Musk announced that he had a merger agreement with Twitter and that Musk would buy the social media company for approximately 44 billion dollars ($54.20 per share in cash). The billionaire announced that he wanted to promote free speech on the website, get rid of spam bots, and add new algorithms to the product. The agreement also had a $1 billion break-up fee.
In May, Musk declared the deal would be on hold while he waited for Twitter to provide data on the percentage of fake accounts using the social media platform, later adding that he was “still committed to [the] acquisition”. These comments caused Twitter shares to decrease 10% in New York morning trade.
When Musk asked for evidence supporting the company’s claim that less than 5% of its users were spam and bot accounts, Twitter reportedly refused to answer. Musk’s estimate for the percentage is four times what the social media company has reported ― 20%.
A letter Musk filed with the US Securities and Exchange Commission read, “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.”
However, the company denied those claims, saying, “Twitter has and will continue to cooperatively share information with Musk to consummate the transaction in accordance with the terms of the merger agreement.”
Musk’s announcement of walking away from the merger agreement has led Twitter’s shares to fall by 7% in extended trading.
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