The break comes after several months where the billionaire has asked questions about how many robot users the company has. Now Twitter can demand a divorce fee from the billionaire, but it can also be an extensive lawsuit.
Photo: GIVEN RUVIC/REUTERS
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On Friday night, Elon Musk confirms that he has announced to Twitter that the plan to buy the company has been terminated.
It appears in a report sent to the US Financial Services Authority (SEC).
– The rapporteur’s (Elon Musk editor’s note) advisers sent a letter to Twitter on July 8 in which they formally made Twitter aware that the reporter is terminating the merger agreement, the report states.
Twitter shares fall six percent in after-sales after the announcement.
The letter to Twitter states that Musk and his financial advisers at Morgan Stanley have requested “critical information” from May 9, and “repeatedly after this” on the company’s relationship between the published figures for daily income-generating active users and the prevalence of ” fake or spam accounts »on the platform.
Musk has repeatedly since the agreement became known in April used to ask questions about how many spam accounts the company has. Twitter has said that less than five percent of the revenue-generating daily users fall into the category of spam accounts.
– If there were questions about the reason for these questions, the letter on May 25 made it clear that Musk’s goal was to understand how many of Twitter’s alleged monthly lucrative users were and how many were actually fake or spam accounts, the letter states.
Divorce fee
Even in these “repeated incidents”, Twitter has reportedly not provided sufficient information about how many of the users are so-called robot users.
Because of this, Musk’s advisers claim in the letter that Twitter has violated one of the points in the acquisition agreement. They claim that this was negotiated in the agreement in order to review data and information that is important for the company’s operations before financing and carrying out the transaction.
There have long been rumors that Musk could scrap the bid. The agreement entails a mutual fee of one billion dollars, if one of the parties breaks it. But Twitter can also take Musk to court to secure a higher breach fee, or demand that he complete the purchase.
Twitter chairman Bret Taylor says the board is determined to haul the transaction ashore at the price and terms agreed. In a message on Twitter, Taylor writes that the board plans to take legal action to land the acquisition.
Bids of over 400 billion.
Fines are currently allowed on Twitter. But the company requires that bot accounts be marked. Twitter has introduced a separate label for fines marked as “good”, such as an account that through its tweets reminds people of the importance of self-care. However, spam bots are not allowed, and the company has guidelines that are intended to combat them, Bloomberg writes.
Twitter has stated that the company faces several challenges before the agreement with Musk is in place, for example whether advertisers will continue to use Twitter and potential uncertainty regarding the company’s future plans and strategy.
It was in end of April it became known that the Twitter board had accepted Tesla boss Elon Musk’s offer to buy the entire company, after a week and a half of fighting.
Musk’s bid was $ 44 billion, which was equivalent to 402 billion Norwegian kroner at the then exchange rate.
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