After Elon Musk, Tesla boss, and SpaceX chief, broke the $44 billion deal for Twitter, there is a legal battle ahead
His lawyers assured Twitter that it has not fulfilled its obligations under the agreement in a Friday letter. This included not providing all information required about spam accounts and inauthentic accounts.
The letter stated that "Twitter failed multiple terms of the agreement and appears to have given false and misleading information on which Mr. Musk relied when entering into the acquisition contract."
Twitter repeatedly stated in recent weeks that there are fewer than 5% fake accounts on its platform. Multi-billionaire Bill Gates and his team believe the network lies, which could have a negative impact on the viability and valuation of the company.
Experts have been wondering for weeks if Elon Musk wanted to withdraw his offer or negotiate a lower price.
The businessman is exposing himself to serious legal proceedings by ending his commitment to purchase Twitter. In certain situations, both parties have agreed to pay severance payments of up to $1 million.
Bret Taylor (chairman of the board) has tweeted that the CA was "determined" to close the transaction at the agreed price and terms and that it would prevail in court.
Elon Musk's decision does not mean that the acquisition will be stopped. Ann Lipton, a Tulane University law professor, tweeted that Musk had signed an agreement he was legally bound to comply with.
Analyst Dan Ives stated that this was a very bad scenario for Twitter and its board. The company will now need to fight Musk in a lengthy legal battle to save the transaction. .
Elon Musk's lawyers discuss in the letter recent layoffs among Twitter employees as well as the hiring freeze.
After gradually increasing the group's capital, the richest man on the planet offered to purchase Twitter for 54.20 dollars per share or 44 billion dollars.
He said that he just had a strong intuition about the importance of a broad, inclusive platform that people can trust for the future civilization at Ted2022.
On April 25, the CA tried to push it back, but finally reached an agreement with the contractor.
Twitter's title has lost over 25% of its value since then. Tesla stock plunged 25% during that period.
Analyst Angelo Zino from CFRA Research noted Thursday that Elon Musk may be feeling "remorse", while the initial price has, according the expert, "become laughable".
To reach the full amount, the leader of South Africa was able to secure the support from several large fortunes as well as investment companies. This helped to reduce his need to borrow money from banks. Because these loans were backed by Tesla securities, they had caused concern in the market.
The events of the past weeks, besides financial considerations, have highlighted the difference between the businessman, Texan-by-adoption, and the San Francisco company.
Elon Musk advocates for less strict content moderation and the return to ex-President Donald Trump.
His vision is not compatible with the vision of many Twitter employees, elected Democrats, and associations. They are asking social media networks to fight hate speech, harassment, and misinformation in the interests of users and democracy.
The fiery entrepreneur is a fan of Twitter and has been followed by over 100 million people. He also made a mockery of executives of the company and sent a poo-shaped Emoji to Parag Agrawal, the boss of the platform. This was during exchanges on spam.
Carolina Milanesi notes that "Twitter's in worse shape now than it was when it started." "Executives have resigned, and nothing has changed." She adds that the worst thing would be for Twitter to force the acquisition to happen. They would be stuck with an owner who doesn’t want the business and is filled with resentment.