Source: The Washington Post / Getty
Elon Musk has officially declared that he is backing out of his agreement to purchase Twitter, citing that the social company made “false and misleading” statements during negotiations.
On Friday(July 8th), the billionaire and his team filed a motion with the Securities and Exchange Commission stating that they were terminating the agreement with the social media platform. They claim that Twitter was in “material breach” of the previous agreement where Musk would buy the company for $44 billion. “For nearly two months, Mr. Musk has sought the data and information necessary to ‘make an independent assessment of the prevalence of fake or spam accounts on Twitter’s platform,’” his legal team wrote in the filing. “Twitter has failed or refused to provide this information.”
Twitter intends to still hold Musk to his agreement. In a statement issued on the platform, the company’s board chairman said: “The Twitter 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.”
The burden of proof that Twitter breached their agreement lies with Musk. Both parties are expected to present their cases in court, and a $1 billion dollar fee is expected to be paid by the party found in breach of the agreement. The Tesla CEO has been publicly signaling that he’d try to back out of the deal for weeks, claiming an overwhelming existence of bots on Twitter as a prime reason, despite the company going to great lengths to provide transparency about the inner workings of the platform and how it finds and deactivates fake accounts.
One instance involved the CEO, Parag Agrawal making a thread on Twitter detailing the company’s process of identifying those accounts in May. Many observers have pointed to how Musk’s public moves since the agreement was announced seemed to lack clear direction, questioning his seriousness in going through with the purchase.
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