(CelebrityAccess) — Outspoken billionaire Elon Musk announced he’s pulling back from a proposed $44 billion deal to buy the short form social media platform Twitter.
In a regulatory filing prepared by his lawyers, Musk said he’s terminating the proposed acquisition over an ongoing disagreement with the company over the number of allegedly fake accounts on the social media service.
Musk, through his attorneys, claimed that the company had failed to provide him with adequate information to count the number of spam accounts, which Twitter maintains is under 5%.
“Mr. Musk and his financial advisors at Morgan Stanley have been requesting critical information from Twitter as far back as May 9, 2022—and repeatedly since then—on the relationship between Twitter’s disclosed mDAU figures and the prevalence of false or spam accounts on the platform. If there were ever any doubt as to the nature of these information requests, the May 25 Letter made clear that Mr. Musk’s goal was to understand how many of Twitter’s claimed mDAUs were, in fact, fake or spam accounts. That letter noted that “Items 1.03 to 1.13 of the diligence request list contain high-priority requests for enterprise data and other information intended to enable Mr. Musk and his advisors to make an independent assessment of the prevalence of fake or spam accounts on Twitter’s platform,” the filing said.
The filing claims that Musk has repeatedly requested information related to Twitter’s process for auditing the inclusion of spam and fake accounts in their monetizable daily active users counts but claimed that Twitter has not been forthcoming with the information.
“In short, Twitter has not provided information that Mr. Musk has requested for nearly two months notwithstanding his repeated, detailed clarifications intended to simplify Twitter’s identification, collection, and disclosure of the most relevant information sought in Mr. Musk’s original requests,” the filing alleged.
The filing went on to note that “Twitter is in material breach of multiple provisions” and that the company appears to have made “false and misleading statements” related to this information.
Twitter indicated it will seek to complete the deal and suggested that they are prepared to go to court.
“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,” Twitter Board Chair Bret Taylor said in a tweet following the news of Musk’s intent to exit the deal.
