Elon Musk’s tumultuous U.S. offer of $ 44 billion to buy Twitter is on the verge of collapse after Tesla’s CEO sent a letter to Twitter’s board of directors saying it was ending the acquisition.
Twitter board chairman Bret Taylor tweeted on Friday that the board is “committed to closing the deal on the price and terms agreed with Mr Musk and plans to take legal action to enforce the merger deal.” “We are confident that we will prevail in the Delaware Chancellery Court.”
Twitter could have requested a $ 1 billion breakout fee that Musk agreed to pay in these circumstances. Instead, he seems willing to fight for the deal, which the company’s board has approved and CEO Parag Agrawal has insisted he wants to consummate.
The possible outcome of the deal is just the latest twist in a saga between the richest man in the world and one of the most influential social media platforms.
Much of the drama has taken place on Twitter, with Musk having more than 95 million followers, lamenting that the company did not live up to its potential as a platform for free speech.
On Friday, Twitter shares fell five percent to $ 36.81, well below the $ 54.20 Musk had offered to pay. Shares of Tesla, meanwhile, rose 2.5 percent to $ 752.29.
In a letter to the Securities and Exchange Commission, Musk said that Twitter “has not complied with its contractual obligations” related to the agreement, that is, it gave Musk enough information to “make an independent assessment of the prevalence of fake or spam accounts on the Twitter platform “.
Main shareholder
Musk’s flirtation with the Twitter purchase seemed 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, taking Private Twitter or create a competitor.
Then, on April 4, it revealed in a regulatory filing that it had become the company’s largest shareholder after acquiring a nine percent 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 would not join the board after all. His offer to buy the company came together quickly after that.
MIRAR | Musk’s Twitter deal raises concerns:
Elon Musk’s Twitter deal provokes a debate over free speech
Called “absolutist of free speech,” Elon Musk’s Twitter acquisition deal is reviving the debate over free speech on social media platforms. Some fear that under Musk’s ownership, Twitter could be exploited as a platform to spread misinformation and control criticism.
Musk had agreed to buy Twitter for $ 54.20 per share, inserting a “420” marijuana reference into its bid price.
It sold approximately $ 8.5 billion in Tesla shares to help finance the purchase, and then bolstered its commitments of more than $ 7 billion from a diverse group of investors, including the big Silicon Valley as Oracle co-founder Larry Ellison.
Within Twitter, Musk’s bid was met with confusion and a drop in morale, especially after Musk publicly criticized 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, stopped discretionary spending, and fired two senior executives. The San Francisco-based company has also been laying off staff, most recently as part of its talent acquisition team.