Elon Musk has called the whole thing off.
The mega-billionaire terminated his $44 billion bid for Twitter, notifying the company Friday in a letter from his lawyers of the decision, according to a regulatory filing.
Musk is claiming that Twitter mispresented the proportion of spam and fake accounts — saying his team’s estimates put that “wildly higher” than the sub-5% figure that Twitter has repeatedly claimed.
“Mr. Musk is terminating the Merger Agreement because Twitter is in material breach of multiple provisions of that Agreement, appears to have made false and misleading representations upon which Mr. Musk relied when entering into the Merger Agreement, and is likely to suffer a Company Material Adverse Effect (as that term is defined in the Merger Agreement),” says the letter to Twitter.
The letter says “it appears that Twitter is dramatically understating the proportion of spam and false accounts represented in its [monetizable daily active user] count.”
Twitter also in breach of the acquisition agreement because the company made false claims to the SEC about fake and spam accounts representing less than 5% of all daily active users, according to Musk’s lawyers.
“Mr. Musk relied on this representation in the Merger Agreement (and Twitter’s numerous public statements regarding false and spam accounts in its publicly filed SEC documents) when agreeing to enter into the Merger Agreement. Mr. Musk has the right to seek rescission of the Merger Agreement in the event these material representations are determined to be false.
More to come.
