All the big hopes over Elon Musk now collapse! – Twitter to sue Elon Musk for trying to call off his $44 billion takeover deal – My Analysis
[This is quite strange. Quite a lot of people were hoping that Musk could help improve things. It certainly sounded as if he was going to change things. I suspect that there was a lot of Buyer's Remorse in this. Once Musk began looking at Twitter, he probably realized he had bitten off more than he could chew. Perhaps, even from early on, he was trying to find a way to backtrack on this. I've never been an Elon Musk fan, even though he's a South African. I don't trust him. You don't get to be that rich without some kind of links. He did say some interesting things which sounded good for a while. I think Elon Musk's excuse makes no sense. If he says that Twitter did not answer his questions properly, HE COULD STILL HAVE BOUGHT TWITTER. All he had to do was to say: I am not happy with your answers and I am revising my bid downwards because you've not answered my question properly and honestly. I think that Elon Musk must have realised, very early on, that this is something he does not want to be in, and he was looking for an excuse to dump this. It is funny that Twitter wants to sue him. I just laugh. Most of these rich people are worthless. Go and buy a gun and join the Militia. That's how things will be fixed in the end. If Musk really thought that Twitter's bots were a huge scam, he could have cut his offer by 30% or 50% or more. He did not have to leave the deal. He could have tried to pick up the company for a dirt cheap price. The fact that he aborted the deal altogether, tells me that he shot his mouth off in the beginning and suffered from Buyer's Remorse and decided to run away from the deal. Jan]
Elon Musk announced on Friday he was terminating his $44 billion (€43.2 billion) deal to buy Twitter, saying "multiple provisions" of the agreement had been breached.
The world’s richest man wrote in a regulatory filing that the social media company had failed to provide information about fake or spam accounts on its platform.
The terms of the deal require Musk to pay a $1 billion (€981 million) break-up fee if he does not complete the transaction. But Twitter is already saying it will fight in court to enforce it.
The chair of Twitter’s board, Bret Taylor, tweeted in response that the 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,” Taylor added.
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The news is the latest twist in a weeks-long will-he-won’t-he saga that saw the billionaire CEO of Tesla and SpaceX publicly accuse Twitter of underestimating the numbers of fake or spam accounts, which are key to the company’s business performance.
In a letter to the Securities and Exchange Commission, Musk said Twitter had “not complied with its contractual obligations” surrounding the deal, namely giving him enough information to “make an independent assessment of the prevalence of fake or spam accounts on Twitter’s platform”.
Much of the takeover drama has played out on Twitter, with Musk – who has more than 95 million followers – also repeatedly lamenting that the company was failing to live up to its potential as a platform for free speech.
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Shares of Twitter fell 5 per cent to $36.81 on the news, well below the $54.20 that Musk had offered to pay. Shares of Tesla, meanwhile, climbed 2.5 per cent to $752.29.
Musk had previously threatened to walk away from the deal if Twitter couldn’t show that less than 5 per cent of its daily active users are automated spam accounts.
He argued, without presenting evidence, that Twitter has significantly underestimated the number of these “spam bots” – automated accounts that typically promote scams and spread misinformation – on its service.
Elon Musk may seek lower price for Twitter after claiming fake accounts make up 20% of users
During a call with executives on Thursday, Twitter said it removes 1 million spam accounts each day, and that these account for well below 5 per cent of its active user base each quarter.
To calculate how many accounts are malicious spam, Twitter said it reviews “thousands of accounts” sampled at random, using both public and private data such as IP addresses, phone numbers, geolocation and how the account behaves when it is active, to determine whether an account is real.
Fake social media accounts have been problematic for years. Advertisers rely on the number of users provided by social media platforms to determine where they will spend money.