A planned takeover of Twitter Elon Musk The report is in “serious danger,” sending the company’s shares down 4% in after-hours trading on Wall Street.
According to the Washington Post, citing three people familiar with the matter, Musk’s team has suspended certain discussions about financing the $44 billion deal. The report says that Musk’s numbers on Twitter’s spam accounts – a bone of contention in the bargain – not checked.
Twitter executives defended their spam policy on Thursday, citing a team of experts and automated processes delete 1 million fake accounts per day, but the report says access to the company’s public tweet data feed has yet to satisfy Musk. Twitter consistently states that less than 5% of its daily active users are spam accounts — a number that Musk has openly questioned.
The report said a “change in direction” from Musk was imminent, suggesting he would follow through on threats to walk away from the agreed-upon deal.
However, legal experts said the world’s richest man, Tesla’s chief executive, would struggle to end the takeover without a legal fight. Contract to buy Twitter The clauses include seeking “specific performance,” which would mean asking a court in the US state of Delaware, which has jurisdiction over the deal, to order Musk to complete the deal at an agreed price of $54.20 per share. Shares traded at $37.10 in after-hours trading.
“Eventually, the Twitter board will tire of the shenanigans and file a suit for special performance in Delaware,” said Brian Quinn, an associate professor of law at Boston College.
Twitter could also charge Musk a $1 billion break if he tries to break the deal. However, signs of a legal strategy to back down emerged last month from Musk’s lawyers sent a letter It warned Twitter that refusing to cooperate on the spam account issue was a “material breach” of the agreement. Musk’s legal team argues that the failure to disclose information about the fake accounts violates a covenant in the contract to act in a certain way during the sales process, allowing him to walk away from the deal.
Twitter later provided data for its 500 million daily tweets to reassure Musk, but a Washington Post report indicates his team was not satisfied with the results of further analysis.
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Carl Tobias, chairman of the Williams School of Law at the University of Richmond, said the deal, which was reported to be “in jeopardy,” was the latest iteration of buyer’s remorse for Musk.
“Putting dust on the bots seemed like an excuse not to lose the $1 billion breakup fee. So for weeks, Musk has been saying he’s not comfortable with the deal, and it looks like he’s trying to back out of the deal.
A Twitter spokesperson said: “Twitter will continue to share information as it works with Mr. Musk to complete the transaction in accordance with the terms of the merger agreement. We believe this agreement is in the best interests of all shareholders. We intend to close the transaction and execute the merger agreement at the agreed upon price and terms.
