Musk’s withdrawal from Twitter deal sets stage for long court battle
Elon Musk withdrew his $44bn bid to buy Twitter on Friday after a months-long saga that rankled investors and shook the market, kicking off what may be a long legal battle with the company.
The Twitter chair, Bret Taylor, said on Friday that the social media firm would sue in a Delaware court to enforce the deal. The deal included a “specific performance” clause, a provision that may force Musk to buy the company as long as he has financing in place. Musk in May said he had secured financing to complete the deal.
Musk may also face a fine of $1bn to walk away, a penalty he is seeking to evade by accusing Twitter of a “breach of multiple provisions” of the agreement, according to a letter filed with the Securities and Exchange Commission announcing the dissolution of the offer.
“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’,” Musk’s team stated in the letter. “Twitter has failed or refused to provide this information.”
The data in question centers on the number of spam accounts on the app, which Twitter has claimed make up about 5% of more than 200m users but Musk believes is higher. Analysts have speculated that the bot issue is being purposely overstated by the executive.
“What Musk and his team are doing is trying to come up with an excuse so that he doesn’t have to pay the penalty fees to walk away,” said Anat Beck, a professor and business law expert at Case Western Reserve University.
In addition to the fine for the failed deal, Musk could face serious consequences from the SEC for his antics, which have had major impacts on the several public companies he manages as well as Twitter itself.
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