Planned takeover of Twitter by Elon Musk At “grave risk,” according to one report, sending the company’s shares down 4% in post-closing trading on Wall Street.
Musk’s team has halted some discussions about financing the $44 billion deal, according to a Washington Post report, citing three people familiar with the matter. The report said that Musk had concluded that the Twitter numbers of spam accounts – a Point of disagreement In the bargain – it was not possible to verify.
Twitter executives defended the spam policy on Thursday, citing a dedicated team and automated processes Get rid of 1 million fake accounts a dayBut the report said access to the company’s feed of public tweet data still failed to satisfy Musk. Twitter has consistently stated that less than 5% of its daily active users are from spam accounts – a number that Musk publicly suspects.
The report said a “change of direction” from Musk was likely to come soon, noting that he would follow up on threats to try to walk away from the agreed-upon deal.
However, legal experts said the world’s richest man, who is also Tesla’s CEO, will struggle to end the takeover without a legal fight. Purchase Agreement Twitter It contains clauses that include seeking “specific performance,” which means requiring a court in Delaware – the US state that has jurisdiction over the deal – to order Musk to execute the deal at the agreed-upon price of $54.20 per share. Shares were priced at $37.10 in after-hours trading.
“Eventually, the Twitter board will get tired of the hoaxes and will sue for a certain performance in Delaware,” said Brian Quinn, associate professor at Boston College of Law.
Twitter could also charge Musk a $1 billion break fee if he tried to back out of the agreement. However, signs of a legal backtracking strategy emerged last month from Musk’s lawyers I sent a message A warning to Twitter that refusing to cooperate on the spam account issue is a “material breach” of the agreement. Musk’s legal team argues that failure to provide information about the fake accounts violates a covenant in the agreement, which is the promise to act in a certain way during the sale, which would allow him to walk away from the deal.
Twitter then provided data on 500 million daily tweets to reassure Musk, but the Washington Post report indicates that he is not satisfied with the results of his team’s subsequent analysis.
Carl Tobias, head of law at Williams University of Richmond, said the deal reported “at risk” was the latest iteration of buyer’s remorse for Musk.
“The bot flick seemed to be just an excuse to avoid having to waive a $1 billion takedown fee. And so, for weeks, Musk seemed to say he wasn’t comfortable with the deal and now appears to be trying to back out of the deal.”
A Twitter spokesperson said: “Twitter has and will continue to collaboratively share information with Mr. Musk to complete the transaction in accordance with the terms of the merger agreement. We believe this agreement is in the best interest of all shareholders. We intend to close the transaction and enforce the merger agreement at the agreed price and terms.”
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