Businessman Elon Musk informed the US stock exchange regulator on Friday that he is canceling the purchase of Twitterwhich was announced last April for 44,000 million dollars, to which the technology responded with the threat of a legal battle to consume it.
In a document sent by Musk’s lawyers to the Twitter legal department and published by the US Securities Market Commission (SEC), the billionaire unilaterally canceled the acquisition, arguing that the technology company has breached its terms of the agreement. The founder of Tesla and SpaceX alleged that the technology company made “false and misleading” statements in its negotiations and that it has not provided information that it considers necessary to close the transaction and that it has been claiming for two months, about the prevalence of false accounts or of spam in the social network. The richest man in the world has been dissatisfied with the technology on several occasions for this “unresolved” issue and pointed out that on June 6 he had already sent a “warning” of cancellation to Twitter and that the “correction period” it’s over.
Twitter says less than 5% of users are fake and spam accounts, something the tycoon considers a “dramatic underestimate” but that he cannot elucidate because, according to the complaint, the company has repeatedly “refused” to give him that data and ignores his requests in that regard. Also key to Musk’s withdrawal is Twitter’s firing of two top executives, downsizing its talent acquisition team and freezing hiring, as well as the recent voluntary departure of three executives, all claiming not to have given their “consent.” “, according to the document.
However, Twitter did not take long to fight back and, minutes after the news was released, its president, Bret Taylor, announced that the Board of Directors planned to “take legal action to carry out the purchase agreement” under the price and terms ” agreed with Musk. In late April, Twitter’s board of directors accepted Musk’s takeover offer for about 44,000 million dollarsat $54.20 per share, which was a hefty premium over then and now as Wall Street has slipped into a bearish cycle.
Shortly after Musk today announced his intentions to break the deal, Twitter fell 6% on the stock market and its shares stood at $34.58 at 6:30 p.m. local time (10:30 p.m. GMT). Its capitalization has fallen 25% since April and has practically been cut in half in the last year. “We are sure that we will win in the Delaware Court of Chancery,” added the president of Twitter, who trusts that court dedicated to large commercial disputes to force the application of the agreement and could seek financial compensation for damages. In the face of the businessman’s allegations, Twitter assures that its data on the false accounts is correct and has made concessions in recent months to give it access to data sources in its system that allow the analysis of tweets. According to the agreement, if the purchase is not consumed there is a “breakup fee” of 1,000 million dollars for the party involved that Musk previously agreed to pay, but there is an exception for “Material Adverse Effect”, a concept he argued in his letter to Twitter today.