Elon Musk announced on Friday July 8 that he was terminating the agreement to buy Twitter for 44 billion dollars and accused the social network of having violated its contractual obligations by notably providing erroneous or incomplete data on the number of false accounts. The board plans to take legal action to enforce the agreement.
Lawyers for the Tesla boss said in a filing that Twitter failed to respond to numerous requests for information about spam accounts and fake accounts, fundamental data for evaluating the company’s performance.
” Twitter violates several provisions of the agreement and appears to have made false and misleading statements that Mr. Musk relied on to conclude the merger agreement “, indicates the document.
Elon Musk had threatened to terminate the takeover deal unless Twitter proved that spam and bot accounts accounted for less than 5% of users who see advertising on its platform. Last month, Twitter granted Elon Musk access to its “firehose”, a repository of raw data on hundreds of millions of daily tweets. According to the billionaire, the company had counted in its total of users suspended accounts which it therefore knew were false.
A future fall in the stock market?
The title Twitter, which had lost 4.85% in session on Wall Street after an article by washington post indicating that the proposed takeover was in jeopardy, lost 7% in after-market transactions.
Twitter board chairman Bret Taylor said the board plans to take legal action to enforce the agreement. ” Twitter board agrees to complete deal at price and on terms agreed with Musk “, he wrote.
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
Under the terms of the deal, the billionaire will have to pay a $1 billion severance fee if he doesn’t close the deal. This decision risks leading to a long legal tussle between Elon Musk and the San Francisco-based company. ” It’s a dire scenario for Twitter and its board, as the company will now have to face Musk in a lengthy court battle to salvage the deal and/or recover at least $1 billion. “Reacted analyst Dan Ives.
Even if the social network emerges weakened from the many adventures of recent months, “ the worst would be if Twitter forces the acquisition to take place “Notes Carolina Milanesi, also an analyst. ” They would end up with an owner who doesn’t want the business and is full of resentment “.
(With AFP)
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