Nearly three months after declaring his intention to buy Twitter and take it off the stock exchange, Elon Musk said on Friday he was stepping down from the deal. In a filing Friday with the U.S. Securities and Exchange Commission (SEC), Musk said Twitter was in “material breach” of the agreement and “appears to have made false and misleading statements” as Musk sought to get information about the problem of fake company accounts.
Twitter has been in turmoil since April, when Mr Musk said he wanted to buy the social media platform. It has raised $46.5 billion in funding to back its unsolicited bid, relying on loans and $33.5 billion from its own capital.
As the deal materialized, some of Twitter’s top executives were pushed out of the company and others resigned. Just this week, the company laid off a third of its HR team.
Lack of cooperation
However, the eccentric billionaire businessman soon began to suggest the deal was “on hold”, complaining about the number of fake accounts on the Twitter platform. The document filed Friday with the SEC says that information about fake or spam accounts is “fundamental to Twitter’s business and financial performance.”
“For nearly two months, Mr. Musk sought to obtain the data and information necessary to make an independent assessment of the prevalence of fake or spam accounts on Twitter’s platform,” the filing said. “Twitter failed or refused to provide this information. Sometimes Twitter ignored Mr. Musk’s requests, sometimes it rejected them for reasons that seem unwarranted, and sometimes it pretended to comply while giving Mr. Musk incomplete or unusable information.”
Given the lack of cooperation, Twitter failed to meet its contractual obligations, Musk claims, giving it the right to terminate the agreement.
Additionally, the document filed by Elon Musk on the stock exchange says, “Twitter’s statement in the merger agreement regarding the accuracy of its disclosures to the SEC regarding fake and spam accounts … may provide additional basis for termination. the merger agreement.”
Additionally, the filing says Twitter’s staff reshuffle amounted to a “departure from its obligation to conduct business in the ordinary course of things” — another alleged violation of the merger agreement.
Twitter did not immediately respond to a request for comment.
Source: “ZDNet.com”