Elon Musk backs out of Twitter acquisition

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Elon Musk renounces; the acquisition of Twitter

Twitter's board of directors announces that it will take the entrepreneur to court in order to enforce the agreement that was reached.

Elon Musk accuses Twitter of having violated its contractual obligations by providing in particular incorrect data on its number of users.

Elon Musk terminates the agreement to buy Twitter for 44 billion dollars and accuses the social network of having violated its contractual obligations by providing in particular erroneous or incomplete data on the number of fake accounts.

The title of Twitter , which had lost 4.85% in session on Wall Street after an article in the Washington Post indicating that the proposed takeover was in jeopardy, plummeted more than 6% in transactions after the markets closed.

Tesla boss had threatened to expose the takeover agreement unless the social network proves that the fake accounts represented less than 5% of users who see advertising on its platform, a figure that Twitter has confirmed for the past few weeks.

However, the multi-billionaire and his team believe that the social network is lying and that this harms the performance of the company and, therefore, the valuation of Twitter.

The Last month, Twitter granted Elon Musk access to a repository of raw data on hundreds of millions of daily tweets.

According to the world's richest man, the company provided incomplete or unusable data, and it appeared that it had counted in its user total suspended accounts of which it was aware therefore they were false.

Elon Musk's lawyers also cite recent layoffs of Twitter employees and hiring freezes as reasons.

For weeks, experts have debated whether Elon Musk was looking to withdraw his offer or renegotiate the acquisition price downwards.

By ending his engagement, the businessman exposes himself to legal proceedings.

In fact, Twitter Chairman of the Board, Bret Taylor, tweeted that the social network is committed to closing the deal. transaction at the price and terms agreed with Mr. Musk, and plans to sue him to enforce the agreement.

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Both parties have agreed to pay severance pay of up to $1 billion in certain circumstances.

It's a dire scenario for Twitter and its administrative board, as the company will now have to face Musk in a lengthy court battle to save the deal or recover at least $1 billion, the company said. analyst Dan Ives.

As for analyst Carolina Milanesi, she thinks that Elon Musk has compiled a list with as many reasons as possible to avoid being scammed. having to pay the fine provided for in the purchase agreement.

Even if the social network emerges weakened from the many adventures of recent months, the worst would be if Twitter forces the acquisition to take place […] They would end up with an owner who does not want not from the company and [which has] resentment, she thinks.

On April 25, Elon Musk seemed to have won his bet, despite attempts to Twitter to push it back. The entrepreneur had an agreement with the group's board of directors to buy the social network at a price of $54.20 per share.

Since then, the title of Twitter has lost more than a quarter of its value. The stock closed Friday's session at US$36.81, down 5.1%.

Most stocks are having a tough year on the stock market: index of the New York Stock Exchange, on which Twitter is listed, has slipped 15% since the start of 2022.

With information from Agence France-Presse, and Reuters

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