Elon Musk officially tries to back out of his US$44 billion deal to acquire Twitter
In mid-April of this year, news broke that the South African billionaire and richest man in the world, Elon Musk, wanted to take over the beloved social network Twitter for around US$44 billion. In a looming yet stunning plot twist, his plans to fully align the company with the constitutional right to freedom of speech have now been put on ice.
According to corresponding reports at CNBC and numerous other media outlets, Elon Musk's lawyers officially announced on Friday evening that the founder and CEO of Tesla and SpaceX has filed to terminate his acquisition of Twitter. Allegedly, Twitter has not fulfilled several contractual obligations, and in the process, Musk has not been provided with various pieces of information that he requested. One of these issues may revolve around statistics on the number of spam and fake accounts, which are quite important from an economic point of view as they could supposedly account for around 5 percent of Twitter's daily users.
However, terminating the Twitter deal could potentially cost Elon Musk dearly, as he contractually agreed to pay US$1 billion in case he backs out of the acquisition. In an initial reaction, the stock price of Twitter tanked by around 5% in after-hours trading on Friday evening, but a long and tedious legal dispute regarding the acquisition and all of the associated financial obligations now seems more likely than ever.
Twitter's board chairman, Bret Taylor, has since published a Tweet in which he asserts that the company "is committed to closing the transaction on the price and terms agreed upon". He further states that Twitter is confident that it will prevail in a possible legal battle against Elon Musk.
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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