In an unexpected twist in the tale, the world’s richest man and the chief executive officer of Tesla Elon Musk has announced baking out from his $44 billion deal to buy Twitter citing that the social media company had breached multiple provisions of the merger agreement and failed to provide enough information about the number of fake accounts on the platform.
The ongoing saga between the maverick businessman who wants to establish human settlements on mars “during your lifetime” and one of the most influential social media networks is heading towards a massive legal showdown. As per an agreement made in April, if a party chose to withdraw from the deal, they would have to pay a fine of $1 billion.
Twitter’s chairman, Bret Taylor tweeted that the board planned to pursue legal action to enforce the merger agreement. “The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk…,” he wrote. It appears that Twitter is readying for a battle to complete the purchase instead of pushing for the break-up fee.
Another reason forwarded by Elon Musk was that Twitter fired high-ranking executives and one-third of the talent acquisition team, breaching Twitter’s obligation to “preserve substantially intact the material components of its current business organization.” As usual, the Twitterati responded to the news by flooding the internet with funny memes.
After the news, shares of Twitter went down 6% at $34.58 which is 36% below the $54.20 per share Musk agreed to buy Twitter in April. “This is a disaster scenario for Twitter and its Board as now the company will battle Musk in an elongated court battle to recoup the deal and/or the breakup fee of $1 billion at a minimum,” one expert opined.