Elon Musk no longer wanted to buy Twitter and pulled out of the acquisition deal

A legal battle is on the horizon after Tesla and SpaceX boss Elon Musk scrapped a deal to buy Twitter for $44 billion.

After several warning signs, the ax fell on Friday, July 8. Elon Musk Termination of repurchase agreement Twitter. In a letter published by the US Securities and Exchange Commission, his lawyers asserted that the social network did not honor the commitments made in the contract, specifically not providing all the information requested on the number of unreliable accounts and spam. “Twitter failed to comply with several terms of the Agreement and appears to have provided false and misleading information that Mr. Musk relied upon to enter into the Acquisition Agreement,” the letter said.

Twitter has said that several times in recent weeks Fake accounts Its platform was less than 5%. The multi-billionaire and his team believe the network is a lie, and this is affecting the credibility and value of the company. For weeks, experts have been wondering whether Elon Musk wants to take back his offer or lower the price and renegotiate. By completing his commitment to buy Twitter, the entrepreneur is exposing himself to substantial legal action. Both parties have pledged to pay severance payments of up to $1 billion under certain circumstances.

“He signed a contract that he must legally honor.”

Brett Taylor, chairman of the site’s board of directors (CA), also tweeted that CA is “determined to complete the transaction at the price and on agreed terms” and intends to prevail in court. The result shown by Elon Musk does not guarantee that the acquisition will not take place. “He signed an agreement that he is legally obligated to follow,” tweeted Ann Lipton, a law professor at Tulane University. “This is a bad situation for Twitter and its team, as the company will now have to face Musk in a long legal battle to save the transaction and/or recover at least $1 billion,” analyst Don Ives said.

In the letter, Elon Musk’s attorneys discuss Twitter’s recent layoffs and hiring freeze of employees. They clearly list as many reasons as possible to avoid paying fines, investigator Carolina Milanesi told AFP. In mid-April, after a gradual — and prudent — rise to the group’s capital, the world’s richest man offered to buy Twitter for $54.20 a share, or $44 billion in total.

The stock has lost a quarter of its value since Elon Musk’s offer

At the Ted2022 conference, he said, “I have a strong intuition that having a public, broadly inclusive platform that you can trust is critical to the future of civilization. CA first tried to push him back, and on April 25, eventually agreed to a final deal with independent entrepreneurs. Since then, Twitter’s title has been Losing more than a quarter of its value. Tesla’s stock also fell nearly 25% during that time. On Thursday, CFRA Research analyst Angelo Zino mentioned Elon Musk’s possible “regret” in a note, while the initially proposed price was, according to the expert, “ridiculous.”

The South African-born leader enlisted the backing of several major wealth and investment firms to achieve the total amount and reduce the amount of debt owed to banks. These loans worried the market because they were loans backed by Tesla bonds. But beyond the financial considerations, the events of recent weeks show the gulf between the businessman, a Texan by adoption, and the San Francisco-based company. Elon Musk defends less strict content controls and the return of figures excluded for breaking the rules like the former president Donald Trump.

A “forced” acquisition, all loss?

His view is at odds with many Twitter employees, unions and elected Democrats, who instead are calling on the social network to better fight hate speech, harassment and misinformation in the interest of users and democracy. With a Twitter following of over 100 million people, the fiery entrepreneur has multiplied criticism and attacks against the social network, going as far as publicly mocking company executives and sending a flower-shaped emoji to the platform’s boss. Barak AggarwalWhen discussing spam.

“Twitter is in worse shape than when it all started,” notes Carolina Milanesi. “Executives have left, nothing is moving forward … but the worst is if Twitter goes through with the acquisition,” he adds. “They end up with an owner who doesn’t like the business and is full of resentment.”

Source: Capital