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Elon Musk threatens to end his Twitter deal

Tesla CEO could end his $44 billion takeover because the social media giant is withholding data on fake accounts

Billionaire entrepreneur Elon Musk has warned Twitter’s board that he may walk away from a deal to buy the social media platform for $44 billion because the company has failed to provide information about fake accounts and spam accounts.

“This is a clear breach of Twitter’s obligations under the merger agreement, and Mr. Musk reserves all resulting rights, including his right not to consummate the transaction and his right to terminate. the merger agreement,” he added. Attorneys for the CEO of Tesla and SpaceX said in a letter to Twitter on Monday.

At issue is Musk’s request for the calculations supporting Twitter’s estimate that less than 5% of its accounts are fake. The South African-born billionaire has claimed around 20% of supposed Twitter users aren’t real, and he’s vowed to crack down on spambots. It said last month that it had suspended the takeover due to concern over fake accounts and that it might try to renegotiate the acquisition price to reflect the number of fake users.

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Twitter said it shared information with Musk under the terms of the takeover agreement. “We intend to complete the transaction and enforce the agreement at the agreed price and terms,”the company said in a statement.

Musk could be hit with $1 billion in severance pay, as well as legal action from investors, if he breaks the deal. Twitter shareholders have already sued him for driving down the company’s stock price by casting doubt on the deal’s completion. The stock fell 1.5% on Monday to $39.56, currently 27% below the $54.20 buyout price Musk has agreed to pay for each share he doesn’t already own.

“At this point, Mr. Musk believes Twitter is transparently refusing to comply with its obligations under the merger agreement, raising further suspicion that the company is withholding requested data due to concern what Mr. Musk’s own analysis of that data will be. to unveil,” his lawyers said in Monday’s letter. “While Twitter is confident in its published spam estimates, Mr. Musk does not understand the company’s reluctance to allow Mr. Musk to independently assess these estimates.”

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Texas Attorney General Ken Paxton has opened an investigation into suspicions that Twitter violated a state law against deceptive marketing practices by reporting false information about its bot accounts.

“If Twitter underreported its number of fake bot accounts, those numbers could have had a negative impact on consumers and businesses in Texas,” paxton said In Monday.

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Musk is the richest person in the world with a fortune estimated by Forbes at nearly $220 billion. He swore to “open” the full value of Twitter by making the platform a haven of freedom of expression.


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