August 11, 2022

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Elon Musk withdraws offer to buy Twitter

For some it is the end of a dream, for others a nightmare

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In a letter released by the U.S. Securities and Exchange Commission, his attorneys asserted that Twitter did not honor the commitments made in the agreement, specifically not providing all the information requested on the counts of unreliable accounts and spam.

“Twitter has breached several terms of the agreement and appears to have provided false and misleading information on which Mr Musk relied in entering into the acquisition agreement,” the official letter said.

Twitter has repeatedly said in recent weeks that the number of fake accounts on its site is less than 5%. The multi-billionaire and his team believe the network is a lie, and it affects the credibility of his business, and therefore the value of the company.

For weeks, experts have debated whether Elon Musk wants to withdraw his offer or lower the price and renegotiate.

By completing his commitment to buy Twitter, the entrepreneur is exposing himself to substantial legal action. Both parties have pledged to pay severance payments of up to $1 billion under certain circumstances.

Brett Taylor, chairman of the site’s board of directors (CA), tweeted that CA is “determined to complete the transaction at the price and terms agreed upon” and intends to prevail in court.

All are losers

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“This is a bad situation for Twitter and its team, as the company will now have to face Musk in a long legal battle to recover the contract and/or recover at least $1 billion,” said analyst Dan Ives.

In the letter, Elon Musk’s attorneys discuss Twitter’s recent layoffs and hiring freeze of employees.

Analyst Carolina Milanesi commented for AFP that they clearly listed as many reasons as possible to avoid paying fines.

On April 25, Elon Musk appeared to have won his race, despite Twitter’s initial efforts to push him away.

After a gradual and prudent increase in the group’s capital, it entered into a definitive agreement with the group’s CA to buy the social network at a price of $54.20 per share, or a total of $44 billion.

Since then, Twitter’s title has lost more than a quarter of its value. Tesla’s stock also fell nearly 25% during that time.

But while the social network has emerged weakened from several misadventures in recent months, “the worst thing is that Twitter is forcing an acquisition,” notes Carolina Milanesi.

“They end up with an owner who doesn’t like the business and is full of resentment.”