In a surprising turn of events, Tesla CEO Elon Musk broadcast his intention to terminate the $44 billion Twitter deal via a letter sent to the board of the social media giant. A Friday letter accused twitter’s secrecy on fake and spam account numbers on the platform as the main reason for the tech mogul’s decision, a Friday letter revealed.
Briefly, the world’s richest man is not happy with the deficiency of information Twitter provided about spam and fake accounts. In the letter, which is addressed to Twitter’s chief legal officer Vijaya Gadde, Musk is terminating the merger because Twitter “appears to have made false and misleading representations” which Musk used as a reference point for his verdict.
Elon Musk primarily agreed and was interested to purchase the crypto-friendly social media platform for $54.20 per share, or about $44 billion, in cash. The board of Twitter was also happy with the decision, unanimously voting in favor of the deal that would make it a privately held company once again.
However, the letter filed for the SEC claimed that Twitter was not very clear about two crucial data — Twitter’s process for auditing the inclusion of spam and fake accounts in monetizable daily active users (mDAU) as well as detecting and suspending such accounts. The social media giant was reportedly secretive about the daily measures of mDAU for the last two years. The letter declaims:
“In short, Twitter has not provided information that Mr. Musk has requested for nearly two months notwithstanding his repeated, detailed clarifications intended to simplify Twitter’s identification, collection, and disclosure of the most relevant information sought in Mr. Musk’s original requests.”
The letter then claims that Twitter is breaching two sections of the merger agreement (Sections 6.4 and 6.11). The letter also adds that the social media company has been on notice of its breach since June 6, and “any cure period afforded to Twitter under the Merger Agreement has now lapsed.”
Though, the Twitter board is definitely not happy with Elon Musk terminating the agreement and walking out on the transaction. Twitter chairman Bret Taylor tweeted that the board is looking to close the transaction on the previously agreed price and will pursue legal action if necessary. “We are confident we will prevail in the Delaware Court of Chancery,” Taylor
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