Tech billionaire Elon Musk has canceled his deal to buy Twitter.
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| Elon Musk and Twitter Logo [Credit: Photo illustration/Peoples Gazette™ Limited.] |
As a reason, his lawyers referred to allegedly insufficient information on the number of fake accounts, according to a statement published by the US Securities and Exchange Commission on Friday. Musk had publicly questioned the Twitter numbers for weeks, which observers interpreted as an attempt to at least push the price down.
Musk has been trying since mid-May to address Twitter's allegedly false estimates of the number of spam and fake accounts. He therefore already declared the takeover deal to be suspended. Musk's lawyers said Twitter had failed to provide Musk and his advisory staff with the data they needed to verify the fake account information for nearly two months. They describe this as such a serious breach of the terms of the contract that the purchase agreement could be terminated. litigation But Musk shouldn't be off the hook that easily - there is a risk of a lengthy legal dispute. He and Twitter have agreed to a $1 billion penalty if either party backs out of the deal.
But if Twitter insists on enforcement, it should still be legally difficult for Musk. The company had repeatedly emphasized that it wanted to enforce the deal. The Twitter management now declared in a first reaction that they would appeal in order to go through with the takeover. The total volume of the project would have been around 44 billion dollars (43.22 billion euros).
Musk offered shareholders $54.20 per share. That would be a good deal for them: Even before Musk's announcement on Friday, the paper was only $ 36.81 from US trading. After the announcement, Twitter shares fell 7.5 percent in after-hours trading. Observers had speculated that given the price difference, Musk was no longer willing to stick to the original bid. Musk had big plans for Twitter. So he had announced that he wanted to take the 16-year-old company off the stock exchange.
At the same time, he had declared that he wanted to make Twitter a haven for freedom of expression and also let the banned former US President Donald Trump back on the platform. Consumer advocates had expressed concern that under Musk's Twitter, too little could be done about hate speech and misinformation.
Musk wanted to increase the number of Twitter users from around 229 million to one billion. However, he wanted to reduce the number of employees from the last 7,500 employees. "At the moment the costs exceed the income," he had explained. Anyone who is relevant to the company has nothing to fear.