2 yıl önce

Elon Musk cancels $44B Twitter buyout, company says it will sue

Musk had threatened to halt the deal unless the company showed proof that spam and bot accounts were fewer than 5 percent of users who see advertising on the social media service.

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Twitter did not immediately respond to a Reuters request for comment.

Tesla Inc Chief Executive Officer Elon Musk said on Friday he was terminating his $44 billion deal for Twitter Inc, saying that the social media company had failed to provide information about fake accounts on the platform.

"Mr. Musk hereby exercises (the) right to terminate the Merger Agreement and abandon the transaction," his lawyers said in a letter to Twitter, a copy of which was filed with the Securities and Exchange Commission.

In a filing, Musk's lawyers said Twitter had failed or refused to respond to multiple requests for information on fake or spam accounts on the platform, which is fundamental to the company's business performance.

Musk lawyer Mike Ringler wrote in the letter to Twitter dated Friday that for nearly two months, Musk has sought data to judge the prevalence of “fake or spam” accounts on the social media platform.

“Twitter has failed or refused to provide this information. 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,” the letter said. It also said the information is fundamental to Twitter’s business and financial performance, and it’s needed to finish the merger agreement.

“From the beginning this was always a head scratcher to go after Twitter at a $44 billion price tag for Musk and never made much sense to the Street, now it ends (for now) in a Twilight Zone ending with Twitter’s Board back against the wall and many on the Street scratching their head around what is next,” Wedbush analyst Daniel Ives wrote in a note to investors after the letter was published.

Twitter to sue Elon Musk

Twitter will sue Elon Musk to enforce the $44 billion deal to buy the company that the billionaire now wants to abandon, the chair of the social media giant's board said.

The likely unraveling of the acquisition was just the latest twist in a saga between the world’s richest man and one of the most influential social media platforms, and it may portend a titanic legal battle ahead.

Twitter could have pushed for a $1 billion breakup fee that Musk agreed to pay under these circumstances.

Instead, it looks ready to fight to complete the purchase, which the company’s board has approved and CEO Parag Agrawal has insisted he wants to consummate.

"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," Bret Taylor tweeted.

"We are confident we will prevail."

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

Spam accounts

On Thursday, Twitter sought to shed more light on how it counts spam accounts in a briefing with journalists and company executives.

Twitter said it removes 1 million spam accounts each day. the spam accounts represent well below 5 percent of its active user base each quarter. To calculate how many accounts are malicious spam, Twitter said it reviews “thousands of accounts” sampled at random, using both public and private data such as IP addresses, phone numbers, geolocation and how the account behaves when it is active, to determine whether an account is real.

Last month, Twitter offered Musk access to its “firehose” of raw data on hundreds of millions of daily tweets, according to multiple reports at the time, though neither the company nor Musk confirmed this.

Private data, which isn’t available publicly and thus not in the data “firehose” that was given to Musk, includes IP addresses, phone numbers and location. Twitter said such private data helps avoid misidentifying real accounts as spam.

Ringler also alleged that Twitter broke the agreement when it fired its revenue product leader and general manager of consumers, as well announcing the layoff of one-third of its talent acquisition team. The sale agreement, he wrote, required Twitter to “seek and obtain consent” if it deviated from conducting normal business.

Twitter was required to “preserve substantially intact the material components of its current business organization,” the letter said.