Elon Musk Notifies Twitter He Is Terminating Deal (cnbc.com) 214
Elon Musk wants to end his deal to buy Twitter, reports CNBC citing a letter sent by a lawyer on his behalf. From the report: In the letter, disclosed in a Securities and Exchange Commission filing, Skadden Arps attorney Mike Ringler charged that "Twitter has not complied with its contractual obligations." Ringler claimed that Twitter did not provide Musk with relevant business information he requested, as Ringler said the contract would require. Musk has previously said he wanted to assess Twitter's claims that about 5% of its monetizable daily active users (mDAUs) are spam accounts.
"Twitter has failed or refused to provide this information," Ringler claimed. "Sometimes Twitter has ignored Mr. Musk's requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr. Musk incomplete or unusable information." Ringler also charged in the letter that Twitter breached the merger agreement because it allegedly contains "materially inaccurate representations." This accusation is based on Musk's own preliminary review of spam accounts on Twitter's platform. Twitter has said it's not possible to calculate spam accounts from solely public information and that a team of experts conducts a review to reach the 5% figure.
"While this analysis remains ongoing, all indications suggest that several of Twitter's public disclosures regarding its mDAUs are either false or materially misleading," Ringer alleged. He also claimed Twitter breached its obligations under the agreement to get Musk's consent before changing its ordinary course of business, pointing to recent layoffs at the company. Twitter shares were down about 5% after hours on Friday. The $44 billion deal was first announced by Twitter on April 25th but was placed "on hold" two weeks later after the social network reported that false or spam accounts comprised less than 5 percent of its 226 million monetizable daily active users, a figure that Musk says the company was not able to prove.
"Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users," Musk tweeted at the time. However, in a follow-up tweet, he added that he was "still committed to [the] acquisition."
Yesterday, Twitter executives told reporters in a briefing that the social network removes more than 1 million spam accounts each day. This raises the question... how many new real accounts does it get each day?
UPDATE: Twitter says it's going to sue Musk for trying to back out of the deal. "The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement," tweeted Twitter's chairman, Bret Taylor, less than an hour after Musk's legal team said he wanted out of the deal in a filing with the Securities and Exchange Commission. "We are confident we will prevail in the Delaware Court of Chancery."
"Twitter has failed or refused to provide this information," Ringler claimed. "Sometimes Twitter has ignored Mr. Musk's requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr. Musk incomplete or unusable information." Ringler also charged in the letter that Twitter breached the merger agreement because it allegedly contains "materially inaccurate representations." This accusation is based on Musk's own preliminary review of spam accounts on Twitter's platform. Twitter has said it's not possible to calculate spam accounts from solely public information and that a team of experts conducts a review to reach the 5% figure.
"While this analysis remains ongoing, all indications suggest that several of Twitter's public disclosures regarding its mDAUs are either false or materially misleading," Ringer alleged. He also claimed Twitter breached its obligations under the agreement to get Musk's consent before changing its ordinary course of business, pointing to recent layoffs at the company. Twitter shares were down about 5% after hours on Friday. The $44 billion deal was first announced by Twitter on April 25th but was placed "on hold" two weeks later after the social network reported that false or spam accounts comprised less than 5 percent of its 226 million monetizable daily active users, a figure that Musk says the company was not able to prove.
"Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users," Musk tweeted at the time. However, in a follow-up tweet, he added that he was "still committed to [the] acquisition."
Yesterday, Twitter executives told reporters in a briefing that the social network removes more than 1 million spam accounts each day. This raises the question... how many new real accounts does it get each day?
UPDATE: Twitter says it's going to sue Musk for trying to back out of the deal. "The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement," tweeted Twitter's chairman, Bret Taylor, less than an hour after Musk's legal team said he wanted out of the deal in a filing with the Securities and Exchange Commission. "We are confident we will prevail in the Delaware Court of Chancery."