Elon Musk has again threatened to pull out of the $44 billion Twitter deal. The Tesla boss accuses the short message service of “obfuscation tactics”. The background.
At first, it seemed as if Elon Musk’s Twitter deal would go through quickly. But now the matter is dragging on and on.
Whether Elon Musk will actually buy Twitter or not is still up in the air. The Tesla boss had already threatened to withdraw from the deal in May. Now Musk has again threatened to withdraw – this time via a letter from his lawyers.
Why does Musk want to back out of the Twitter deal?
The back-and-forth over Elon Musk’s Twitter deal is entering its next round. A letter from his lawyers states that Musk is convinced that “Twitter is manifestly refusing to comply with its obligations under the Merger Agreement.”
With this, the Tesla CEO again alludes to the ambiguous number of fake accounts on Twitter. Musk had already announced in May that he wanted to put the deal on hold for the time being. The reason he gave was his desire to have precise data on the number of fake accounts on Twitter.
In a quarterly report, Twitter had issued the number of fake and spam accounts at less than five percent. Musk, on the other hand, believes the number is significantly higher.
At a tech conference in Miami, he put his estimate at at least 20 percent of all Twitter accounts. However, he said the number is “as unknown as the human soul.”
Musk is not satisfied with the numbers provided by Twitter
On June 1, Twitter had responded to Musk’s request in a letter. The short message service offered to provide the Tesla boss with more details on how to count fake accounts.
But that was apparently not enough for Elon Musk. In the letter from his lawyers, it says that Twitter is trying to “obfuscate and confuse” the facts with its behavior.
The company is thus feeding suspicions that it is not releasing the requested data “out of concern for the results of Musk’s own analysis.” Therefore, Elon Musk reserves all rights not to complete the transaction and to terminate the merger agreement.
What happens if Musk really does back out of the deal?
If Elon Musk really decides to let the Twitter takeover fall through, there could be a penalty payment. Both sides have agreed on a penalty of one billion US dollars if one of the contracting parties withdraws from the deal.
The only exception would be if Musk is right in his assumption that Twitter has significantly more spam accounts than the microblogging service wants to admit. In that case, Musk would probably be able to withdraw from his Twitter deal without the penalty payment.