Just a few months after having his offer to purchase Twitter accepted by the company’s board, Elon Musk stated that he would like to end his $44 billion acquisition of the social network. CNBC is reporting that Musk’s lawyer notified the company’s chief legal officer on July 8 that he no longer wishes to take control of Twitter.
Musk cites in a letter through his attorney that “Twitter has not complied with its contractual obligations” and that the company has not provided the billionaire with the information necessary to make the sale final.
Twitter has previously claimed that only around 5% of the monetizable daily active users (mDAUs) are spam accounts, an assertion that has been rebuffed by Musk. Through Musk’s attorney, he says that the actual number of spam accounts on the social network has not been provided by Twitter, leading to the reneging of the deal.
— Elon Musk (@elonmusk) July 11, 2022
Twitter responds to Musk’s change of heart
Bret Taylor, the board chair of the platform, sent out this tweet just a few days ago that Twitter intends on completing the sale and are willing to go to court in order to make it happen:
The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery.
— Bret Taylor (@btaylor) July 8, 2022
As a refresher, Musk had previously offered to purchase Twitter at a 54% markup back in April, at $54.20 per share. Earlier that month, the Space-X CEO purchased a 9% stake in the company, with the aim to get on the Twitter board. The offer to buy the platform was initially resisted by those with decision-making power at the company, but after toying with the idea of a ‘poison pill’, the company agreed in principle to sell to Musk.
Twitter’s shares fell by more than 5% at pre-open on Monday, with the Musk news largely being attributed to the move in share price.
Social media reaction to the news
Twitter users’ response to the announcement were mixed, as it typically is with news surrounding the billionaire. Those who were against the move chalked it up as a publicity stunt by Musk:
You might think that Elon Musk backing out of a $44 bIllini Twitter deal is bad, but it’s nothing compared to when he backed out of his $6 billion promise to the UN to help solve world hunger.
— Read Wobblies and Zapatistas (@JoshuaPotash) July 8, 2022
“Free speech is the bedrock of a functioning democracy, and twitter is the digital town square where matters vital to humanity are debated” —Elon Musk pic.twitter.com/kMJmOgLZ8a
— Scott Galloway (@profgalloway) July 10, 2022
While those who were originally for Musk purchasing the platform are predictably blaming Twitter for not providing the Tesla founder and CEO with the requisite information regarding spam accounts.
Elon musk is terminating his agreement to buy Twitter: So basically Twitter has a huge amount of spam accounts —way more than they let on — and has gotten busted for it!!!
As I said weeks ago spam accounts are probably 50% not 5% of Twitter users. A
— Donald Trump Jr. (@DonaldJTrumpJr) July 8, 2022
Elon Musk is going to end up buying Twitter for $17 and a box of old Pokémon cards.
— Tim Young (@TimRunsHisMouth) July 8, 2022
It remains to be seen whether Musk will be forced to make the purchase at the price previously agreed on, or whether Twitter will remain in the hands of its current leadership.