Elon Musk said on Friday (8) he is ending his deal to buy Twitter for $ 44 billion, accusing the network of having provided “false and misleading” information about the number of fake accounts and spam on the platform.
Twitter chairman Bret Taylor responded quickly, saying the group was “committed to closing the transaction at the price and terms agreed with Musk” and would seek legal action to secure the deal.
“We are confident that we will prevail in the Delaware Court of Chancery [um tipo de corte de arbitragem extrajudicial]”, he added.
In a filing, the Tesla billionaire’s lawyers claimed that Twitter was “materially violating several provisions” of the sale agreement and “appeared to have made false and misleading claims.”
The number of spam and fake accounts among its users was much higher than the 5% estimated by Twitter, according to a preliminary analysis by Musk’s advisers, the document says.
Separately, according to the document, Musk is “considering” whether Twitter’s “declining business prospects” and financial projections also violate the agreement.
The document accused Twitter of failing to meet its obligations to “conduct its business in the normal course” after Chief Executive Parag Agrawal announced a hiring freeze, fired two senior employees and this week said he was suspending the contract of a third of your talent acquisition team.
Twitter shares were down 8% after the announcement.
Musk had previously said that Twitter’s failure to provide information about fake accounts was an obstacle to securing funding from banks involved in the transaction, which agreed to lend the money for the billionaire’s takeover. He has repeatedly indicated that he was considering backing out of the deal he proposed in April.
Under the terms of the deal, Musk can terminate the transaction by paying a $1 billion fine if he is unable to obtain financing. However, Twitter plans to go to court, and US courts have historically sided with sellers when buyers try to close deals, to discourage them from backing out on dubious pretexts.
Since Musk agreed to buy Twitter in April, valuations of tech companies have dropped sharply, making their acquisition of the social network particularly expensive compared to other rivals. The share price of Snap, one of Twitter’s closest competitors, has dropped more than 65% this year.
Musk secured funding from several investors for his purchase of Twitter, including Oracle co-founder Larry Ellison and venture capital group Sequoia Capital.
The billionaire caused a stir on Wall Street when he announced his bid to take over Twitter in a bid to “bring free speech” back to the platform. In an interview with the Financial Times, he said he would reverse the “morally wrong” ban on former President Donald Trump, imposed after the January 6, 2021, attack on the US Capitol.
(Translated by Marcelo Azevedo)
I have over 8 years of experience in the news industry. I have worked for various news websites and have also written for a few news agencies. I mostly cover healthcare news, but I am also interested in other topics such as politics, business, and entertainment. In my free time, I enjoy writing fiction and spending time with my family and friends.
