Elon Musk seeks to cancel Twitter deal
The Twitter board is suing to close the transaction on the price and terms agreed upon
➡️ The Shortcut Skinny
Elon Musk made a move to cancel his $44 billion deal to buy Twitter
Musk cites Twitter’s lack of transparency on fake or SPAM accounts
Twitter reps say that the company will sue to close the deal
There’s a $1 billion penalty if Musk bows out of the acquisition
Elon Musk wants to log out of his $44 billion deal to acquire Twitter with a Securities and Exchange Commission filing (SEC filing) that cites “Twitter’s non-responsiveness as a material breach.” Twitter, in turn, is planning to sue to close the agreement.
The Twitter breach, according to Musk? Fake and SPAM Twitter accounts are key to his backing out, he says. Musk has been publicly critical of the deal and the SEC filing makes it clear that, in his eyes, Twitter failed or refused to provide “an independent assessment of the prevalence of fake or spam accounts on Twitter’s platform.”
For the birds, for the courts
Even if Musk’s claims that Twitter isn’t being transparent and has more than 5% fake accounts (as the company has previously stated) are true, it might not matter in the end. Backing out of this deal carries a non-trivial $1 billion penalty and it’ll be up to the courts to decide if the SPAM accounts aspect matter.
Twitter chairman Bret Taylor tweeted 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. We are confident we will prevail in the Delaware Court of Chancery.”
What’s the future of Twitter?
The Twitter stock was down nearly 5% today on the rumor that Elon Musk’s deal with in jeopardy, and it has sunk another 5% in after-hours trading when the news did break in the late afternoon.
Beyond that, Twitter employees (and those who recently left) have spoken on Twitter Spaces saying that there’s uncertainty considering Twitter management almost went through the Musk deal without enough hesitation and protest (others have noted that Twitter CEO Parag Agrawal had little choice other than to do what was in the best interest of Twitter shareholders – go with Musk’s overinflated price per share).
It seems as if Twitter’s stock price could continue to sink – much like all tech stocks have in 2022 – now that there may be no deal to take the social media company private pegged at a specific buyout number. Moreover, analysts continue to speculate on who could buy Twitter if Elon Musk doesn’t end up owning the company – it’ll likely be cheaper and have damage done to it considering there’s been such a big spotlight on the fact that it has an unknown amount of SPAM bots and fake accounts.
One glimmer of good news
Let’s leave you with good news. We’re getting a Twitter edit button, whether or not Elon Musk exits the $44 billion deal for the social media platform. Twitter has said that it was already working on the idea to be included in Twitter Blue (the paid service) long before Musk ran a poll about the idea. It’s supposed to launch in 2022.
At the very least, if the Twitter edit button is done right, that could be a major boon to the user experience and help put grammar hawks at ease.
Latest news on PS5 restock dates in the US