Elon Musk Wants Out Of $44 Billion Twitter Deal, Twitter Likely To Sue

Elon Musk, CEO of SpaceX and Tesla, has retracted his US$44 billion offer to buy Twitter. A notice of termination was filed through the US Securities and Exchange Commission (SEC) alleging that Twitter had breached multiple provisions of its initial agreement with Musk:

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

‘Misrepresentations’ Made by Twitter

Just three months after Musk’s April announcement that he would purchase Twitter, the billionaire has declined to finalise the deal citing various breaches of the initial agreement, according to an SEC filing from his attorneys:

Twitter … appears to have made false and misleading representations upon which Mr Musk relied when entering into the merger agreement, and is likely to suffer a company material adverse effect.
Skadden, Arps, Slate, Meagher & Flom LLP

The SEC filing also suggests Musk had sought the necessary data to independently assess the prevalence of fake or spam accounts on Twitter’s platform. Twitter had reportedly failed or refused to provide this information:

Elon Musk said he’s terminating his $44bn agreement to acquire Twitter and take it private, saying the company has made “misleading representations” as part of the deal. Twitter hasn’t “complied w/its contractual obligations” over issue of spam bots on the platform,” he said Fri. pic.twitter.com/OVzmiS2YD8
— Holger Zschaepitz (@Schuldensuehner) July 8, 2022

Despite Musk’s change of heart, Twitter has no intentions to go down quietly. Bret Taylor, one of its chairmen, has shared that the company’s board seeks to close the transaction as per the original agreements. The social media giant says it will be pursuing legal action.

Initial Promise All About ‘Free Speech’

Musk initially purchased Twitter with the intention of privatising the social media giant. The billionaire touted the notion that freedom of speech would reign supreme, tweeting that he hoped that “even [his] worst critics remain on Twitter because that is what free speech means”. However, the decision was met with a sizeable backlash suggesting the move would be “dangerous for democracy”.