Elon Musk has terminated his $ 44 billion contract to acquire the social media giant Twitter.
In a file filed with the U.S. Securities and Exchange Commission, Musk’s lawyers alleged that the social media company is “materially in breach of several provisions of that Agreement, appears to have made false and misleading statements on which Mr. Musk relied upon entering in the Merger Agreement, “and says Musk will likely suffer financially as a result.
The news was first reported by Reuters on Friday.
The CEO of Tesla sent a letter to Twitter’s board saying it is ending the acquisition.
But Twitter does not accept Musk’s statement. Twitter chairman Bret Taylor tweeted in response that the board is “committed to closing the transaction with the price and terms agreed with Mr. Musk and plans to take legal action to enforce the merger agreement.” that we will prevail in the Delaware Chancellery Court. “
Twitter could have been pressured by a $ 1 billion breakout rate that Musk agreed to pay in these circumstances. Instead, he appears to be ready to fight to complete the deal, which the company board approved and CEO Parag Agrawal insisted he wants to consummate.
The possible unfolding 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 unfolded on Twitter, with Musk having more than 100 million followers, lamenting that the company did not live up to its potential as a platform for free speech.
On Friday, Twitter shares fell 5% to $ 36.81, well below the $ 54.20 Musk had offered to pay. For its part, Tesla shares rose 2.5% to $ 752.29.
Musk’s flirtation with the Twitter purchase appeared to begin in late March. That’s when Twitter said it contacted members of its board, including co-founder Jack Dorsey, and told them it was buying shares of the company and that it was interested in joining the board, privately on Twitter or creating a competitor. Then, on April 4, it revealed in a regulatory filing that it had become the company’s largest shareholder after acquiring a 9% stake worth about $ 3 billion.
At first, Twitter offered Musk a seat on his board. But six days later, Twitter CEO Parag Agrawal tweeted that Musk will not join the board. His offer to buy the company quickly came together after that.
Musk agreed to buy Twitter for $ 54.20 per share, inserting a “420” marijuana reference into its bid price. It sold about $ 8.5 billion in Tesla shares to help fund the purchase, and then bolstered its more than $ 7 billion commitments from a diverse group of investors, including big Silicon Valley hitters like Oracle co-founder Larry Ellison.
Within Twitter, Musk’s offer was received with confusion and a drop in morale, especially after Musk publicly criticized one of Twitter’s top lawyers involved in content moderation decisions.
While Twitter executives were preparing for the deal to move forward, the company froze hiring, stopped discretionary spending, and fired two managers. The San Francisco company has also been laying off staff, most recently as part of its talent acquisition team.
This is a developing story. Please see the updates again.
Elon Musk ends Twitter’s $ 44 million deal
Source link Elon Musk ends Twitter’s $ 44 million deal