South African billionaire Elon Musk finally decided not to move forward with his plans to buy over Twitter and withdraw the US$ 44 billion he had once offered.
Musk's legal team said in a note to the US body regulating stock transactions that the social network did not comply with contractual obligations and did not provide the requested information, after which Twitter announced it would take legal action against the tycoon.
The deal became unfeasible after data regarding the number of spam and fake accounts the Tesla boss had requested was not delivered at first and when it finally became available it turned out to be unreliable.
Twitter had long insisted that spam or fake accounts represented 5% of the total, while the Space X founder has reason to believe the number is much higher.
“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,” the filing reads.
“Twitter is in material breach of multiple provisions of that Agreement, appears to have made false and misleading representations upon which Mr. Musk relied when entering into the Merger Agreement,” it also said.
The company’s chairman, Bret Taylor, tweeted on Friday evening that, “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.”
Musk will be sued for US$ 1 billion, the break-up fee for failing to complete the transaction.
Twitter's board had unanimously agreed to sell the platform to Musk in April, in a deal that stirred controversy about free speech and misinformation. Musk, who has over 95 million followers, regretted the company was not living up to its potential as a platform for free speech.
Twitter CEO Parag Agrawal had said in May that the social media network estimates that fewer than 5 percent of all its users are fake. “The hard challenge is that many accounts which look fake superficially – are actually real people,” he wrote. “And some of the spam accounts which are actually the most dangerous – and cause the most harm to our users – can look totally legitimate on the surface.”
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