Elon Musk won’t be buying Twitter after all. As reported by Bloomberg’s Ed Ludlow, Musk is terminating his agreement to purchase the social media giant based on a new filing with the Securities and Exchange Commission [SEC].
More from filing: On July 8, 2022, the Reporting Person's advisors sent a letter to Twitter (on the Reporting Person's behalf) formally notifying Twitter that the Reporting Person is terminating their merger agreement. $TWTR @elonmusk
— Ed Ludlow (@EdLudlow) July 8, 2022
A law firm representing the Tesla CEO sent a letter to Twitter on Friday, alleging that it appears “to have made false and misleading representations” when Musk agreed to buy the company on April 25 and has “breached” multiple provisions of the initial agreement.
In the letter sent to Twitter on Friday, Musk’s lawyer alleges that Twitter has given “incomplete or unusable information,” adding that information regarding spam and fake accounts was critical to close the deal.
“For nearly two months, Mr. Musk has sought the data and information necessary to ‘make an independent assessment of the prevalence of fake or spam accounts on Twitter’s platform,'” his lawyer wrote. “This information is fundamental to Twitter’s business and financial performance and is necessary to consummate the transactions contemplated by the Merger Agreement because it is needed to ensure Twitter’s satisfaction of the conditions to closing, to facilitate Mr. Musk’s financing and financial planning for the transaction, and to engage in transition planning for the business.”
“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,” Musk’s lawyer added.
“While Twitter has provided some information, that information has come with strings attached, use limitations or other artificial formatting features, which has rendered some of the information minimally useful to Mr. Musk and his advisors,” the letter states.
Musk’s lawyer also alleges that “all indications suggest that several of Twitter’s public disclosures regarding its [monetizable daily active users] are either false or materially misleading.”
Twitter board of directors Chairman Bret Taylor responded to the letter on Friday evening, stating that it plans to pursue legal action to enforce the merger agreement between Musk.
“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,” 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.
— Bret Taylor (@btaylor) July 8, 2022
After-hour shares of Twitter fell by 6% following the announcement by Musk’s lawyer.
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