Elon Musk Tries to Step Away From Twitter Acquisition

Elon Musk is trying to stop his $44 billion attempt to buy Twitter, according to a letter sent by a lawyer on Musk's behalf to Twitter's chief legal officer today. According to a recent Tweet by Bret Taylor, chief of the Twitter board, they will not tear up the deal so quickly and are committed to not letting Musk step away. 

Taylor said, "The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery."

Musk Lawyer's letter claims a valid reason to exit, though, disclosed in an SEC filing, Musk's attorney Mike Ringler stated, "Twitter has not complied with its contractual obligations."

The letter states Twitter did not provide Musk with critical business information, as Ringler said the contract required. Musk previously hoped to analyze Twitter's assertion that only about 5% of its daily active users are spam or bot accounts.

The letter from Ringler says, "Twitter has failed or refused to provide this information… Sometimes Twitter has ignored Mr. Musk's requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr. Musk incomplete or unusable information."

Some people on Twitter speculate that following research, Musk realized that the site has significantly more Bots than first claimed. One user claimed, "Twitter got exposed. It's all bots. There's like 100,000 people on here at most."

Ringler agrees in the letter, stating, "While this analysis remains ongoing, all indications suggest that several of Twitter's public disclosures regarding its mDAUs (monetizable daily active users) are either false or materially misleading."

Twitter pressuring to keep Musk inside the deal is understandable. Musk agreed on a purchase price with Twitter of $54.20 per share, and the company is currently trading at less than $37. This would be a profitable trade for every current shareholder, including their board, inspiring them to fight Musk's exit.

Author: Garrett Meifert

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