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Elon Musk abandons deal to buy Twitter; company says it will sue

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Elon Musk announced Friday that he will abandon his tumultuous $44 billion offer to buy Twitter after the company failed to provide enough information about the number of fake accounts. Twitter immediately fired back, saying it would sue the Tesla CEO to uphold the deal.

The likely unraveling of the acquisition was just the latest twist in a saga between the world’s richest man and one of the most influential social media platforms, and it may portend a titanic legal battle ahead.

Twitter could have pushed for a $1 billion breakup fee

that Musk agreed to pay under these circumstances. Instead, it looks ready to fight to complete the purchase, which the company’s board has approved and CEO Parag Agrawal has insisted he wants to consummate.

“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 filing states.

Musk also charged Twitter with allegedly failing to continue to conduct its regular business — a breach of the purchase contract — noting it had fired two key, high-ranking employees while announcing it was laying off a third of its talent acquisition team.

In response, Twitter board chair Bret Taylor tweeted Friday the company intends to pursue legal action to close the transaction.

“Sometimes Twitter has ignored Mr. Musk’s requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr. Musk incomplete or unusable information,” reads the filing.

The filing also states that Twitter fired “two key, high-ranking employees,”

laid off a third of its talent acquisition team, instituted a general hiring freeze, and more without Musk’s consent.

The Twitter Board says it now plans to sue Musk to ensure the deal goes through.

“We are committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plan to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery,” the Twitter Board said in a statement provided to PEOPLE Friday.

Musk and Twitter both agreed in April that if a party chose to withdraw from the deal,

that party would have to pay a fine of $1 billion.

Musk’s attorney, Mike Ringler, stated the deal is being called off because Musk does not believe Twitter has provided adequate information about how many fake and spam accounts populate the platform.
In a letter to Twitter, Ringler claimed the company is in “material breach of multiple provisions” of its agreement with Musk by allegedly not providing sufficient information.
Twitter’s stock price plunged more than 5% on Friday to close at $36.81 after reports surfaced the deal was in serious jeopardy, before dropping another 6% in after-hours trading to around $34.50 following the SEC filing.

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