Billionaire Elon Musk pulled the plug on his $44 billion deal to buy Twitter, accusing the company of “misleading” statements about the number of fake accounts.
In a regulatory filing, Elon Musk’s lawyers said Twitter had failed to respond to multiple requests for information on fake or spam accounts on the platform, which is fundamental to the company’s business performance.
Elon Musk also alleged that Twitter breached the agreement when it fired two top managers, without his consent as required by their contract.
Twitter’s chairman, Bret Taylo, said the board will pursue legal action to enforce the merger agreement. “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,” Mr Taylor tweeted.
The terms of the deal require Tesla and SpaceX boss Elon Musk to pay a $1 billion breakup fee if he does not complete the transaction.
In May, Mr Musk said he was putting the deal on hold until the social media company provided details to back its claim that spam or fake accounts constitute less than five per cent of its active users.
Last month, he warned Twitter that he might walk away from his deal to acquire the social media platform if it fails to provide the data on spam and fake accounts that he seeks.
In response, Twitter offered Mr. Musk access to its “firehose” of raw data on hundreds of millions of daily tweets. Twitter said such private data helps avoid misidentifying real accounts as spam.
Twitter has maintained that no more than five per cent of accounts are run by software instead of people, while Musk has said he believes the number to be much higher.
Elon Musk had vowed to restore free speech on the micro-blogging platform. “I hope that even my worst critics remain on Twitter because that is what free speech means,” he tweeted in April as he finalised the $44 billion deal to takeover Twitter.
One of the reasons Elon Musk gave for his interest in taking Twitter private was his belief he could add value to the business by getting rid of its spam bots – the same problem that he’s now citing as a reason to end the deal.