Elon Musk has paved stage for a legal dispute, which might have a negative financial impact on the social media platform Twitter. Citing that Twitter was falling short of its potential as a platform for free speech, the legal dispute between the world’s richest man Elon Musk and Twitter started after the Tesla CEO announced that he would abandon his tumultuous $44 billion offer to buy the social media platform.
Elon Musk and Twitter: A saga
May, Musk stated that the deal was “temporarily on hold” while he awaited data concerning the number of spam and fake Twitter accounts. The billionaire businessman demanded proof over Twitter’s claim that less than 5% of its overall users are spam and bot accounts.
Musk added that Twitter’s decision to remove senior executives and a third of its talent acquisition team infringed on its duty to “preserve substantially intact the material components of its current business organisation”. Although these are basically the two main reasons that Elon Musk and Twitter deal is off, additional factors may possibly have had an impact on the agreement.
Musk’s attorney, Mike Ringler, claimed the much talked about Elon Musk and Twitter deal was terminated because Twitter failed to provide data to judge the prevalence of “fake or spam” accounts on its platform.
Interestingly, Twitter has immediately fired back, saying it would sue the Musk to uphold the deal.
Musk cancels the twitter deal.
The announcement of the pullback was made after an official letter addressed to Twitter’s top legal officer on Musk’s behalf surfaced on July 8,Friday.In the letter, disclosed in a Securities and Exchange Commission filing, Skadden Arps attorney Mike Ringler said that “Twitter has not complied with its contractual obligations.”
A legal dispute has been prompted by Musk’s attorneys’ repeated allegations. The deal was simply the most recent twist in a story involving the richest man in the world and one of the most prominent social media networks
Twitter still hopeful of the deal?
It was in April when Elon Musk and Twitter reached an understanding that any party choosing to back out of the transaction would be required to pay a $1 billion penalty. Twitter’s board pledged to “pursue legal action” in a news release on Friday night to uphold the terms of the $44 billion agreement Musk made in April to buy the social network and take it private. Twitter’s board chairman, Bret Taylor, has tweeted that the company is “committed to closing” the deal and plans to “pursue legal action to enforce the merger agreement.”
Bret Taylor Tweet
“We are confident we will prevail in the Delaware Court of Chancery,” Taylor wrote. Twitter’s board said it was certain the company would win in court, but experts warn — and employees worry — that Musk’s letter sets the atmosphere for a volatile moment that might present significant financial concerns for the business and its employees.
In addition, much of the turmoil around Elon Musk and Twitter deal has been addressed on Twitter. Musk who has more than 100 million twitter followers, criticized the social network’s shortcomings as a platform for free speech considering its enormous influence over current politics and news coverage.
Since April, Twitter’s stock has plunged more than 20%, considerably below the price Musk proposed to acquire it. After news broke that the deal was in jeopardy, Twitter’s stock price dropped more than 5% to finish at $36.81 on July 8,Friday. After the SEC filing, it fell another 6% during after-hours trading to roughly $34.50. Twitter’s stock has continued to decline while Tesla’s has climbed higher.
Elon Musk and Twitter
The legal dispute between Tesla CEO Elon Musk and Twitter started after the billionaire announced that he would abandon his tumultuous $44 billion offer to buy the social media platform.