The agreement for Elon Musk to purchase Twitter is being scrapped. Following unresolved disagreements with Twitter’s leadership regarding the platform’s prevalence of fake accounts, the world’s richest man and founder of Tesla has announced that he will no longer pursue his proposed $44 billion acquisition of the social media company. His attempt to acquire Twitter in April incited a firestorm in the technology industry.
Elon Musk Canceled The Twitter Deal
Musk stated, through his attorneys, in a regulatory filing that Twitter had not provided the information essential to quantify the number of those accounts, which the company has stated is less than 5 percent of the total. In a brief that tried to void the agreement, his legal team stated that Twitter “appears to have made false and misleading claims” and “is in serious breach of various sections” of the contract.
As a response, Twitter’s board of directors issued a threat to “pursue legal action” in order to enforce the conditions of the $44 billion deal Musk struck in April. These clauses include a $1 billion breakup fee in the event that he reneges on the arrangement. It would appear that a drawn-out court struggle is unavoidable.
Twitter’s share price, which had already dropped by 18 percent since Musk’s offer, dropped by a further 4.8 percent in trading that took place after regular business hours on Friday evening after word of the dispute leaked. Some people believe that Elon Musk is trying to renegotiate the terms of the purchase in order to get out of his obligations by threatening to back out of the transaction.
Both CEO Parag Agrawal and legal head Vijaya Gadde, both of whom garnered Musk’s ire for an unclear reason, were thrust into the spotlight as a result of his planned bid and the subsequent breakdown of the deal. In response to Agrawal’s efforts to publicly clarify the spam issue, Musk answered with an emoji of a poop. In addition to this, he criticised Gadde for the alleged suppression of stories that were critical of the Biden family, stating that it was “clearly terribly inappropriate.”
Agrawal, who took over as CEO from co-founder Jack Dorsey in November 2021, around six months before Musk’s bid, has recently branded himself as a lame-duck CEO in the midst of the acquisition talks. Dorsey took over as CEO in November 2021. A former Twitter executive was quoted as saying to the Financial Times that he is now willing to “go to war” to make the merger happen. This is in part because, according to the present terms of the buyout, he would be due to earn a dividend of $42 million if the sale were to go through.
At the “billionaire summer camp” in Sun Valley, Idaho, where both of the CEOs are slated to speak in front of business magnates such as Bill Gates, Warren Buffett, and others, it is anticipated that the two executives will come face to face on Saturday.
Former President Donald Trump has also waded into the controversy, writing, “THE TWITTER DEAL IS DEAD, LONG LIVE THE “TRUTH.” This is a reference to Trump’s social media network, Truth Social, which has an estimated two million active members, in comparison to the 300 million users on Twitter.