Elon Musk terminates $44b Twitter deal over 'lack of data about bot accounts'

8 July 2022, 22:39 | Updated: 8 July 2022, 23:14

Elon Musk has pulled the plug on his $44b deal to take over Twitter.

Mr Musk has sent a letter to the social media company's board saying he is terminating the acquisition.

In a statement provided to the US Securities and Exchange Commission, representatives for Mr Musk said Twitter breached terms of an agreement and "appears to have made false and misleading representations".

His representatives also said Twitter had not provided data and information that the Tesla founder had requested - specifically about fake 'bot' accounts on the platform.

Mr Musk wanted proof that the spam accounts accounted for fewer than 5 per cent of users who see advertising on the site.

Twitter said it will sue Mr Musk to complete the merger he just rejected, and is "confident" it will prevail.

The possible unravelling of the deal is just the latest twist in a saga between the world's richest man and one of the most influential social media platforms.

Much of the drama has played out on Twitter, with Mr Musk - who has more than 95 million followers - lamenting that the company was failing to live up to its potential as a platform for free speech.

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On Friday, shares of Twitter fell 5 per cent to 36.81 dollars, well below the 54.20 dollars that Mr Musk had offered to pay.

Shares of Tesla, meanwhile, climbed 2.5 per cent to 752.29 dollars.

In a letter to the Securities and Exchange Commission, Mr Musk said Twitter has "not complied with its contractual obligations" surrounding the deal, namely giving him enough information to "make an independent assessment of the prevalence of fake or spam accounts on Twitter's platform".

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Mr Musk's flirtation with buying Twitter appeared to begin in late March.

That is when Twitter has said he contacted members of its board - including co-founder Jack Dorsey - and told them he was buying up shares of the company and interested in either joining the board, taking Twitter private or starting a competitor.

Then, on April 4, he revealed in a regulatory filing that he had became the company's largest shareholder after acquiring a 9 per cent stake worth about three billion dollars.

At first, Twitter offered Mr Musk a seat on its board.

But six days later, Twitter CEO Parag Agrawal tweeted that Mr Musk will not be joining the board after all.

His bid to buy the company came together quickly after that.

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Mr Musk had agreed to buy Twitter for 54.20 dollars per share, inserting a "420" marijuana reference into his offer price.

He sold roughly 8.5 billion dollars worth of shares in Tesla to help fund the purchase, then strengthened his commitments of more than seven billion dollars from a diverse group of investors including Silicon Valley heavy hitters like Oracle co-founder Larry Ellison.

Inside Twitter, Mr Musk's offer was met with confusion and falling morale, especially after he publicly criticised one of Twitter's top lawyers involved in content-moderation decisions.

As Twitter executives prepared for the deal to move forward, the company instituted a hiring freeze, halted discretionary spending and fired two top managers.

The San Francisco company has also been laying off staff, most recently part of its talent acquisition team.