Twitter says it is prepared to take legal action to ensure Elon Musk follows through with the original agreement. After first striking a deal to buy Twitter for $44 billion, Musk had started to show signs that he was no longer quite as keen to take over the platform. Those doubts manifested into a formal attempt to terminate the agreement earlier today.
Elon Musk is no stranger to Twitter considering it is a platform the Tesla and SpaceX CEO uses on a regular basis to provide updates, public announcements, and even memes. However, the news of Musk actually buying Twitter sent shockwaves around the internet and led to many suggestions that the platform was about to significantly change – for the better or worse was up for debate.
Earlier today, Musk sent a letter to the SEC to confirm termination of the agreement, citing Twitter’s failure to provide adequate information and data on Twitter’s bot and spam problem. Following the release of that letter, the Twitter board has responded. According to Bret Taylor, chairman of the board, Twitter says it still plans to close the deal at “the price and terms agreed” with Musk. The statement then goes on to say that Twitter plans “to pursue legal action to enforce the merger agreement.”
There were already concerns raised that Musk would attempt to pull out of the agreement and there is the understanding that such a move could cost Musk as much as $1 billion in termination fees. Of course, that is still significantly less than the $44 billion that was originally agreed upon. It currently remains unclear if the bot data allegations made by Musk’s team would be enough to get out of the deal without having to make a termination payment, which is where the legal case is likely to come into play. For reference, the $1 billion termination fee applies to both Musk and Twitter and allows either side to exit the deal at any point.
In comparison to Musk’s letter to the SEC, the statement issued by Twitter is extremely short and to the point. It would seem that Twitter has not taken kindly to Musk’s attempt to back out of the deal, and that makes sense. It might have only been a short period since Musk first made a move to buy the platform, but the company has been left somewhat shaken after effectively being forced into the deal. Now that Musk appears to be trying to pull out of the agreement, it is understandable that Twitter wants it to complete as agreed, or be paid the termination fee as agreed. Whether or not Twitter can force Musk to buy Twitter or pay up is up for debate, but it’s quite the turnaround from April when Elon Musk was trying to force Twitter to sell.
Source: Bret Taylor/Twitter
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Author: John Finn