It looks like Elon Musk isn’t going to buy Twitter after all. The tech billionaire has terminated the $44 billion deal. After a long and at times controversial process, Musk isn’t going to buy Twitter and take the company private. The news will be disappointing to some. It seemed that there were too many issues for the billionaire to take the plunge.
- Elon Musk made a $44 billion offer to purchase Twitter back in April of this year
- After the deal was announced, many online took sides on either side of the debate
- Musk made points about the amount of bot (fake) profiles on the social media platform
- In an SEC filing, Musk’s representatives said “Twitter is in material breach of multiple provisions of [the] Agreement”
Musk’s representatives sent a letter to Twitter notifying them of the termination of the deal. The potential buyer noted that spam bots were big issues for him among other material concerns in the deal.
Elon Musk and his representatives claim that “Twitter has not complied with its contractual obligations.”
The letter also said, “because Twitter is in material breach of multiple provisions of that Agreement, appears to have made false and misleading representations upon which Mr. Musk relied when entering into the Merger Agreement, and is likely to suffer a Company Material Adverse Effect.”
The deal would have been a full buyout of shareholders at a rate of $54.20 per share. The company’s shares currently sit at $36.81.
Twitter Suing Elon Musk?
On his own personal Twitter, as well as in official filings and statements, Elon Musk has been adamant don knowing how many bot accounts there are. A bot is a fake account, basically. Muska and his representatives have insisted that they have not been given the information that they requested. Musk wants to know if more than 5% of the accounts on the social media site are so-called “bots” or not.
While that may or may not be true, these situations are more than just a simple exchange of cash and ownership. A little more paperwork than just buying a used pickup or something. The government is involved and there are contractual obligations from both parties that have to be fulfilled.
Twitter may be suing the tech billionaire. The idea is that Twitter’s lawsuit would ultimately force the purchase of the site and make Elon Musk go through with the entire thing. So, $44 billion may get exchanged by the end of this.
I’m sure that this is just the beginning of a whirlwind of news regarding Twitter and Musk.
Tesla and Twitter Shares Have Gone Down Since April
Once the deal was announced back in April, a few things happened. One of the consequences was the fact that both the Tesla and Twitter share prices went down. In a big way. At one point this year, Tesla stock was worth more than $1,100 per share. Since the deal was announced, it’s gone from that April high all the way to $752.29. While that is much higher than most stocks, an almost 40% drop in value is never great.
As for Twitter, the value was above $70 near the end of 2021. And as mentioned above, it is now worth less than $40 per share. About a 50% drop in value. The stress and drama seemed to be a detriment to both companies.