By: Alex Yang
Elon Musk is seeking to end his bid to buy Twitter, stating that there have been multiple breaches of the engagement. The announcement is the latest occurrence after Elon Musk decided to buy Twitter in April. Mr. Musk stated that had he backed out because Twitter has yet to provide enough information on spam and fake accounts.
Although Musk is looking to end the arrangement, Twitter says it plans to pursue legal action to enforce the agreement. “The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk,” the Chairman of Twitter wrote. This turn of events could potentially start a long legal battle between Elon Musk and Twitter.
In May, Elon Musk asked for evidence to back the company’s assessment that spam and bot accounts make up less than 5% of its total users because. Mr. Musk believes that bots and spam accounts could actually be around 20 percent of twitter’s users.
But in a letter sent to the US Securities and Exchange Commission, Elon Musk’s lawyer stated that Twitter has failed 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,” says Musk’s lawyer. This has had the effect of Twitter stocks dropping by 7 percent.
This might also be another reason that Musk wants to pull out of the deal. The stocks of technology companies have been dropping severely in the past few months. There is also the impact the deal was having on Musk’s other companies; the share stocks for Tesla has fallen since Musk has sent his deal to Twitter.
While some of these claims are hypothetical, what isn’t is the impact pulling out of this deal will have on Twitter and the tech scene. There is high potential for us to see legal battles and changes in both Twitter and Musk’s companies after this decision that will impact users.
Link: https://www.bbc.com/news/business-62102821