Elon Musk no longer plans to buy Twitter and has terminated the agreement. Even though a deal had been agreed and confirmed, and it looked like the Tesla and SpaceX CEO would be taking over the Twitter reins, the deal was still subject to various conditions. One such condition Musk is now saying Twitter has failed to meet and is being used as a way out of the deal.
Twitter, as well as the internet in general, exploded back in April when Musk confirmed that he had made an offer to buy Twitter outright, after already securing a minor stake in the company. In spite of some initial pushback from Twitter’s board, the deal was eventually forced through. At which point, it seemed guaranteed that Musk would soon be in sole control of Twitter.
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Musk’s team has now sent a letter to Twitter, via the Securities and Exchange Commission, confirming he is pulling out of the deal. According to the letter, Musk is terminating the agreement due to a “material breach of multiple provisions” by Twitter. The letter then goes on to suggest that Twitter has “made false and misleading representations” which is argued would lead to negative company effects. This ‘material adverse effect’ clause is commonly used in purchase agreements and as a way, when justified, to end a deal as Musk now seems to be doing.
Over the past few weeks it had seemed as though Musk was starting to think twice about the decision. The first doubts properly surfaced when Musk took issue with the number of bot and spam accounts on the platform, claiming that there were far more than Twitter had originally confirmed – and agreed the deal on. The letter once again touches on this point and uses it as justification for the termination of the deal. Specifically, claiming that Twitter has had two months to provide acceptable data, has failed to do so, and in turn, “has not complied with its contractual obligations.” According to the letter, Twitter has “failed or refused” to provide the data Musk has requested.
It is not totally surprising that the outspoken CEO is building on the same claims and using bots as a way to exit the deal but whether this is the final episode in the Musk-Twitter saga remains to be seen. Either way, it is starting to look like Musk is no longer interested in taking over Twitter. On a positive note, Elon Musk does now have more than 100 million followers on the platform, so it’s unlikely that he’ll be leaving Twitter anytime soon.