According to a source, Elon Musk’s acquisition of Twitter is seriously jeopardized, sending the company’s stock down 4% on Wall Street after-hours trading.
According to a story in the Washington Post, three individuals familiar with the matter said that conversations over finance for the $44 billion acquisition have been halted by Musk’s team. Musk believed that Twitter’s data on spam accounts, a key issue in the acquisition, were unreliable.
Twitter officials said on Thursday that specialized staff and automatic systems purge 1 million fake accounts daily, , but the report added that access to Twitter’s stream of public tweet data had not satisfied Musk. When it comes to spam accounts, Twitter has regularly asserted that less than 5 percent of its active users per day are fake accounts, a statistic that Musk publicly questions.
Judicial experts, on the other hand, predicted that the world’s wealthiest man, who is also Tesla’s CEO, would have a hard time stopping the takeover without a legal battle.
If Musk violates the terms of the deal, Twitter has the right to charge him a $1 billion break fee. When Musk’s attorneys warned Twitter that a reluctance to comply on the spam account problem was a “material breach” of the contract last month, it seemed to be a legal plan to back out. If Musk’s legal team is correct, it might enable him to walk away from the arrangement since he failed to disclose the existence of fake accounts in the agreement, which violates a covenant.
However, according to the Washington Post, even when Twitter gave him data from its 500 million daily tweets, Musk was still unsatisfied with the findings of their own research.
Carl Tobias said “The dustup over bots seemed to be pretextual to avoid having to forfeit the $1bn breakup fee. Thus, for weeks, Musk seemed to be saying that he was not comfortable with the deal and he now appears to be attempting to back out of the deal.”
A Twitter spokesperson said: “Twitter has and will continue to cooperatively share information with Mr Musk to consummate the transaction in accordance with the terms of the merger agreement. We believe this agreement is in the best interest of all shareholders. We intend to close the transaction and enforce the merger agreement at the agreed price and terms.”