July 8 (Reuters) – Tesla Inc ( TSLA.O ) Chief Executive Elon Musk said on Friday he was scrapping his $44 billion deal for Twitter Inc ( TWTR.N ), saying the social media company had not provided information for fake accounts on the platform.
Shares of Twitter fell 7% in extended trading. Musk offered $54.20 per share in April.
In a filing, Musk’s lawyers said Twitter has failed or refused to respond to multiple requests for information about fake or spam accounts on the platform, which is central to the company’s business performance.
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“Twitter is in material breach of multiple provisions of this agreement, appearing to have made false and misleading statements on which Mr. Musk relied when entering into the merger agreement,” the filing said.
The announcement is another twist in the will-he-won’t-he saga after the world’s richest man struck a $44 billion deal for Twitter in April, but then delayed the buyout until the social media company proved that spam bots were less than 5% of its total users.
The terms of the deal require Musk to pay a $1 billion breakup fee if he doesn’t complete the deal.
Musk had threatened to halt the deal unless the company provided proof that spam and bot accounts accounted for less than 5% of users who saw an ad on the social media service.
The decision is likely to lead to a protracted legal battle between the billionaire and the 16-year-old San Francisco-based company.
Twitter did not immediately respond to a Reuters request for comment.
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Reporting by Chavi Mehta in Bengaluru; Editing by Sriraj Kalluvila and Lisa Shumaker
Our standards: The Thomson Reuters Trust Principles.
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