Elon Musk scraps $44 billion Twitter deal, sets stage for legal battle| Top 10
The Elon Musk-Twitter deal was the biggest buyout offer the world of technology has seen in the recent times.
Elon Musk has finally revealed that he won't acquire Twitter, after all. Why? The spam accounts have seemingly turned out to be a deal breaker in the mega buyout proposal, which has been keenly watched in the world of technology over the last few months. While speculation was rife that the tech billionaire was rethinking the acquisition, Twitter has now said it would take the world's richest person to court.
Here are ten points on the Elon Musk pulling out of the Twitter deal:
1. "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," Twitter chairman Bret Taylor said shortly after the big announcement.
2. The Tesla chief on Friday said he was pulling out of the deal as he accused Twitter of breaching multiple provisions of the merger agreement. He said - in a filing - that the social media giant had failed to offer transparent information on the spam accounts on the microblogging site.
3. "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," the filing said.
4. “Mr. Musk and his financial advisors at Morgan Stanley have been requesting critical information from Twitter as far back as May 9, 2022—and repeatedly since then—on the relationship between Twitter’s disclosed mDAU figures and the prevalence of false or spam accounts on the platform. If there were ever any doubt as to the nature of these information requests, the May 25 Letter made clear that Mr. Musk’s goal was to understand how many of Twitter’s claimed mDAUs were, in fact, fake or spam accounts,” it further read.
5. In the Delware courts, according to a Reuters report, where disputed mergers and acquisitions often land up, the legal battle usually ends up with the companies re-negotiating deals or the acquirer paying the target a settlement to walk away. It’s not clear how long the battle would last.
6. Twitter shares took a hit yet again with Musk abandoning the deal. The stock fell as much as 9 per cent in postmarket trading, a report by Bloomberg said.
7. Musk has also been accused of pushing down Twitter's stock prices, which have been dwindling ever since the acquisition plan was announced earlier this year.
8. The 51-year-old had sold shares worth billions in Tesla for his ambitious takeover.
9. But the acquisition announcements had triggered fears over moderation of content on the microblogging site as Musk called for “free speech”. Many activists had raised strong concerns.
10. Amid the corporate tussle, Musk is set to speak Saturday at Allen & Co.’s Sun Valley Conference in Idah where Twitter CEO Parag Agrawal is also expected to be present.
(With inputs from Reuters and Bloomberg)