Twitter Pockets $1 Billion After Elon Musk Says He Is Not Going Ahead With Deal
- Elon Musk has officially walked out on the deal to acquire Twitter a few hours after reports emerged the deal may be called off
- Twitter said that it is considering a legal action to force the deal through while Musk said the platform did not provide enough information on spam accounts
- Twitter will pocket $1 billion which is a clause in the deal signed in April that if a party should walk away from the deal, they'd pay a penalty of $1 billion,
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A few hours after Legit.ng reported that Elon Musk’s Twitter deal is in serious jeopardy and that the billionaire may pull out, Musk informed the Securities and Exchange Commission that he is terminating the $44 billion deal.
Musk informed the platform on Friday, July 8, 2022, that he is terminating the deal, Forbes’ report said, citing an SEC filing. But the Twitter’s board Chairman said it is considering legal action in order to force the deal through.
Company to enforce deal through legal action
The board chairman of Twitter tweeted that the company wants to see the deal through and plans to explore legal options to enforce the merger agreement.
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Both parties agreed in April that if a party chose to withdraw from the deal, that party would have to pay a fine of $1 billion.
Musk doubts report on number of spam account
Musk’s lawyer, Mike Ringler said the deal is being called off because Musk is doubtful that Twitter has given sufficient information about how many fake and spam accounts exist on the platform.
Ringler’s letter to Twitter claimed the company is a ‘material breach of multiple provisions’ of its agreement with Musk by not giving enough information.
The share price of the microblogging site fell more than 5 per cent, closing at $36.81 after the report emerged that the deal was in serious danger before it dropped another 6 per cent after a few hours of trading at about $34.50 following the filing.
Doubts grow over Elon Musk’s deal to buy Twitter, billionaires team question platform’s claim on bots
Legit.ng reported that Elon Musk’s plan to buy Twitter is about to hit the rocks, The Washington Post report said, citing three people familiar with the matter.
According to the sources, Musk’s camp concluded that Twitter’s report on Spam accounts cannot be verified, saying that the team has since stopped engaging with Twitter in some discussions about funding the $44 billion acquisition.
This includes a party that is named as the deal backer, one of the sources said.