PostedJuly 8, 2022, 11:48 PM
Billionaire Elon Musk announced on Friday that he was giving up on acquiring Twitter. The social network immediately announced legal action.
Elon Musk was to buy Twitter for $40 billion.
AFP
It’s the end of a dream for some, a nightmare for others: Elon Musk, the boss of Tesla and SpaceX, ended Friday the agreement to buy the social network Twitter for 44 billion dollars.
In a letter published by the American stock market policeman, his lawyers assure that Twitter has not respected its commitments made in the agreement, in particular by not providing all the information requested on the number of inauthentic accounts and spam.
“Twitter breached multiple terms of the agreement, and appears to have given false and misleading information upon which Mr. Musk relied in entering into the acquisition agreement,” the official letter reads. .
Twitter has repeatedly said in recent weeks that the number of fake accounts on its platform is less than 5%. The multi-billionaire and his team believe that the network is lying, and that this affects the viability of his business, and therefore the value of the company.
Court battle
For weeks, experts have debated whether Elon Musk was looking to withdraw his offer or renegotiate the price lower.
By ending his commitment to buy Twitter, the businessman exposes himself to substantial legal proceedings. Both parties have pledged to pay severance pay of up to $1 billion in certain circumstances.
The chairman of the board of directors (CA) of the platform, Bret Taylor, has also tweeted that the CA was “determined to conclude the transaction at the price and on the terms agreed” and intended to prevail in court.
All losers
“This is a dire scenario for Twitter and its board, as the company will now have to face Musk in a lengthy legal battle to salvage the deal and/or recover at least $1 billion,” analyst Dan Ives said. .
In the letter, Elon Musk’s lawyers also discuss recent layoffs of Twitter employees and the hiring freeze. They clearly “listed as many reasons as possible to avoid having to pay” the fine, commented analyst Carolina Milanesi for AFP.
On April 25, Elon Musk seemed to have won his bet, despite initial attempts by Twitter to push him away. After being gradually, and discreetly, increased in the capital of the group, he made a definitive agreement with the CA of the group to buy the social network at a price of 54.20 dollars per share, or 44 billion dollars in all. Since then, the title of Twitter has lost more than a quarter of its value. Tesla’s stock also tumbled nearly 25% over that time.
But even if the social network emerges weakened from the many adventures of recent months, “the worst would be that Twitter forces the acquisition to take place”, notes Carolina Milanesi. “They would end up with an owner who doesn’t want the business, and is full of resentment.”
(AFP)