Tesla CEO and the richest man on the planet, Elon Musk, has decided to back out on his deal to buy Twitter for $44 billion. In a recent filing made by Musk, he stated that Twitter has not complied with its contractual obligations.
Notably, according to the two entities’ merger agreement signed on April 26, Twitter was supposed to provide Elon with all information he required for business purposes related to the transaction. In particular, Elon wanted all the details related to the flood of spam bots and accounts across the social media platform.
Twitter transaction on hold
After Twitter estimated that 5% of its accounts were fake, Musk put the agreement on hold in May. The transaction is currently on hold while details are gathered to support the estimate that less than 5% of users are spam or fake accounts, he said.
The document describes how Musk repeatedly asked the platform for specific evidence to explain the predominance of spam accounts but was never provided with appropriate replies.
As per the filing, the information the platform did offer “has come with strings attached, use limitations or other artificial formatting features, which has rendered some of the information minimally useful to Mr. Musk and his advisors.”
However, there is a chance that the termination won’t go well. The provision permitting Twitter to compel the billionaire to complete the merger was part of the original merger agreement.
Notably, the news doesn’t come as a surprise to our readers. As TheCoinRise reported, in June, Musk threatened to back out of the Twitter deal due to a lack of transparency. At the time, Musk’s legal team wrote a letter to SEC which stated:
“As Twitter’s prospective owner, Mr. Musk is clearly entitled to the requested data to enable him to prepare for transitioning its business to his ownership and to facilitate his transaction financing. To do both, he must have a complete and accurate understanding of the very core of Twitter’s business model—its active user base.”
In April, Elon Musk proposed to the managers of the social media platform to allow Dogecoin payments to Twitter Blue subscribers.
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