Only a few months ago, Elon Musk offered to buy Twitter for $44 billion. Since the offer was made, the company stock has dropped more than 25% below the figure. This led some investors to believe that Musk might not complete the transaction after all.
Also Read: What is the Spotify Pie Chart and how to make your own
In recent months, the billionaire has worked hard to negotiate the deal, in turn purchasing the company at a lower price as stocks fall. In fact, by constantly mentioning spam bots on the platform, Musk may be attempting to highlight Twitter issues and, as a result, bring down the buyout price.
In one of the most recent findings, Twitter revealed that there were 5 percent of spam bots on the platform in the last quarter, which Musk believes is untrue. According to the Tesla CEO, about 20 percent of spam accounts on the platform were. In fact, in one of his previous interviews, Musk said that spam bots are one of Twitter most annoying problems.
In line with that, on Monday, Musk sent a letter to the microblogging platform saying Twitter was in "clear material breach" of its obligations and that the Tesla CEO reserves all rights to terminate the merger agreement.
Also Read: iPhone 14 vs iPhone 13: Few major upgrades
"Musk believes Twitter is "clearly refusing to comply with its obligations under the merger agreement," which "raises the possibility that the company is withholding the requested data out of concern for what Musk's own analysis of that data will reveal," according to the letter. It also stated that "Musk believes the company is actively opposing and thwarting his access to information."
Responding to Musk, Twitter said it would collaborate with the Tesla CEO to share information. "Twitter continues to cooperatively share information with Mr. Musk to complete the transaction in accordance with the terms of the merger agreement," the statement read. “We believe that this agreement is in the best interest of all shareholders. We intend to close the transaction and enforce the merger agreement at the agreed price and terms.”
Also Read: Xiaomi 12 Ultra price, specs and launch timeline leaked online
Back in March, Musk said he would "temporarily halt" the deal if the social media platform did not provide data on the proportion of its fake accounts. The question that arises here is, can Musk really close the Twitter deal after making the offer?
The Twitter sale agreement allows Musk to exit the deal if the microblogging site causes a "material adverse effect," which is defined as a change that negatively affects Twitter's business or financial conditions. Is. Perhaps that's why Musk is constantly talking about spam bots, which, according to him, are the most "annoying problem" on the platform. Another problem Musk may face is interest payments against the $13 billion loan, which appears to be a problematic deal over time.
In the end, if Musk decides to back out of the deal, he will bear the loss. In that case, he might have to pay a $1 billion breakup fee. In fact, Twitter may sue Musk to compel Musk to complete the acquisition on the agreed-upon terms.