Late Friday night, Elon Musk disclosed that he is pulling out of his $44 billion deal to buy Twitter, citing the lack of information about the number of Twitter users that are made up of bots. A lawyer representing Musk claimed in a letter to Twitter’s top lawyer that this placed Twitter “in material breach of multiple provisions” of the original agreement, which was signed in April.
It’s the latest twist in a long winded process in which the billionaire Tesla CEO became Twitter’s biggest shareholder, turned down a board seat, agreed to buy the social media platform and then started raising doubts about going through with the deal. The next chapter in the saga? A court battle.
For weeks, Musk has expressed concerns that there are a greater number of bots and spam accounts on the platform than the social media platform has said publicly.
Some financial analysts have speculated that the concerns may be an attempt to create a pretext to get out of a deal that Elon may now see as overpriced, after Twitter shares — along with the broader tech market — have declined in recent weeks.
On Friday, Twitter board chair Bret Taylor said in a Tweet:
Investors in Twitter (TWTR) are not happy. Yesterday, shares closed 11% lower at $32.65, erasing about $3.2 billion in market price, and well off of April’s agreed-upon $54.20-a-share purchase price.
But other tech stocks are also sharply lower since April, including shares of Tesla (TSLA), which have fallen 31% since Muck’s initial holdings in Twitter were disclosed in April.
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