American businessman and billionaire, Elon Musk, has pulled out of the $44 billion Twitter deal after negotiating and dealings broke down between the billionaire and the tech giant. Musk who in April 2022 declared his interest to buy Twitter, has made a U-Turn stating that Twitter failed to provide enough information on the number of spam and fake accounts.
According to a letter, his lawyer Mike Ringler sent on Musk’s behalf to a Securities and Exchange Commission, "Twitter has not complied with its contractual obligations. Twitter has failed or refused to provide this information. Sometimes Twitter has ignored Mr Musk’s requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr Musk incomplete or unusable information.
"While this analysis remains ongoing, all indications suggest that several of Twitter’s public disclosures regarding its mDAUs are either false or materially misleading."
In response to the accusations and collapse of the deal, Twitter's chairman, Bret Taylor, has stated that the board has planned to pursue legal action to enforce the merger agreement. According to his tweet,
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.— Bret Taylor (@btaylor) July 8, 2022
After Musk’s letter was published, shares of Twitter fell 5% to $36.81, well below the $54.20 that Musk agreed to pay. Shares of Tesla, meanwhile, climbed 2.5% to $752.29.