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Elon Musk pulls out of $44bn deal to buy Twitter

Elon Musk is attempting to halt his $44 billion (£36 billion) purchase of Twitter, claiming many violations of the contract.

The news follows the world’s richest person’s decision to purchase Twitter in April as the most recent twist in a protracted drama.

Mr. Musk claimed that the reason for his withdrawal was that Twitter has not given sufficient details on the quantity of spam and false accounts.

According to Twitter, legal action will be taken to enforce the contract.

Twitter CEO Bret Taylor tweeted, “The Twitter Board is committed to complete the acquisition on the price and terms agreed upon with Mr. Musk,” laying the stage for what may become a prolonged court fight.

A $1 billion (£830 million) break-up fee is stipulated in the original merger agreement.

In May, Mr. Musk stated that the agreement was “temporarily on pause” as he awaited information on the quantity of spam and false Twitter accounts.

The company’s claim that less than 5% of its users are spam and bot accounts was challenged by the wealthy businessman, who demanded proof.

Mr. Musk’s attorney said in a letter sent to the US Securities and Exchange Commission that Twitter had either failed to give or refused to supply this information.

 

For some weeks, Elon Musk has been attempting to learn how many daily active Twitter users there are.

Bots are a concern on Twitter. In reality, it just recently claimed to be removing a million spam accounts daily.

In a filing, Mr Musk said he’d repeatedly been refused information about the number of bot accounts on Twitter – which is why he wished to terminate the deal. Elon Musk though has already put pen to paper on this deal, and it is not totally clear whether he can back out at this stage.

Elon Musk will need to prove that Twitter breached their agreement. There are other potential reasons why Mr Musk might want to pull out of the deal. The stock market price for large tech companies has fallen steeply in the last few months – did Musk offer too much?

Additionally, there was the proposed merger’s effect on Mr. Musk’s other businesses. Since he revealed his interest in Twitter, the share price of Tesla has drastically decreased.

His stance on free speech and how Twitter could filter in the future—based on the legal systems of other nations—also occasionally came out as naive. Did Elon Musk eventually come to the conclusion that he had taken on too much?

The letter states that Twitter has “at times disregarded Mr. Musk’s requests, at times rejected them for reasons that appear to be arbitrary, and at times purported to comply while providing Mr. Musk with inaccurate or incomplete information.”

Spam accounts are made to disseminate information to a big audience and influence how they use the site. Twitter deleted around 1 million such accounts every day on Thursday.

Mr. Musk thinks that up to 20% of Twitter users are likely to be spam or automated accounts.

Following the news, Twitter’s stock dropped by 7% in after-hours trade.

The creator of the electric vehicle firm Tesla and the rocket company SpaceX, Mr. Musk is reportedly the richest man in the world.

 

As a self-described “free speech absolutist,” he had promised to relax Twitter’s content control policies as soon as he acquired the business.

He has long criticized Twitter for blocking some accounts, like the one belonging to former US President Donald Trump.

Additionally, he has asked for greater transparency in the mechanism that permits select tweets to be promoted and sent to larger audiences on the site.

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