Musk: Doubt about spam accounts could scuttle Twitter deal
Tesla CEO Elon Musk says his deal to buy Twitter can’t move forward unless the company shows public proof that less than 5% of the accounts on the platform are fake or spam.
OCT 5: In a letter to the firm, Mr Musk agreed to pay the price he offered months ago before trying to quit the deal.
The surprise reversal comes just weeks before the two sides were due in court.
Twitter, which had sued Mr Musk to force the takeover to move forward, was seen as having the stronger case.
In the letter, attorneys for Mr Musk said he intended to move ahead to complete the transaction, pending receipt of the financing and an end of the legal fight.
A spokesperson for Twitter acknowledged the firm had received the proposal, adding "the intention of the company is to close the transaction at $54.20 per share" - the price that Mr Musk promised in April.
The apparent win for Twitter sent its shares soaring more than 20% to more than $52 apiece. But the value remained lower than the takeover price, in a sign of lingering investor doubts the deal will go through.
Later on Tuesday, Mr Musk wrote in a tweet: "Buying Twitter is an accelerant to creating X, the everything app".
When Mr Musk first revealed plans to buy Twitter in a $44bn deal, he said he wanted to clean up spam accounts on the platform and preserve it as a venue for free speech.
But the billionaire, a prolific Twitter user known for his impulsive style, balked at the purchase just a few weeks later, citing concerns that the number of fake accounts on the platform was higher than Twitter claimed.
Twitter executives denied the accusations, arguing that Mr Musk - the world's richest person with a net worth of more than $220bn - wanted out because he was worried about the price.
The back-and-forth followed a sharp downturn in the value of technology stocks, including Tesla, the electric car company that Mr Musk leads and is the base of much of his fortune.
The fight, which was scheduled to go to trial 17 October, saw the two sides face off in lengthy court filings, private messages and bitter public spats on Twitter, where Mr Musk has more than 100 million followers.
In one such exchange, Mr Musk responded to Twitter boss Parag Agrawal with an emoji for faecal matter.
Preparation for the trial had ensnarled many of the biggest names in tech, as lawyers for the two companies demanded communications about the deal.
Mr Musk, who could have paid a $1bn break-up fee to walk away, was set to be interviewed ahead of the trial this week.
Some industry watchers, who were taken by surprise by the development, questioned whether the latest twist was a concrete offer or a delay tactic.
SEPT 14: The decision was made in a short conference call with investors from the company's San Francisco headquarters.
It means Twitter will now try to force Elon Musk to buy the company in the courts.
The meeting followed explosive testimony from Twitter's former head of security Peiter Zatko in front of the US Senate.
In April, Twitter agreed to sell the company to the world's richest person, Elon Musk.
However, the deal soured after Mr Musk alleged he was misled by Twitter about the number of spam and bot accounts on the platform.
He said he no longer wished to purchase the company in May, but Twitter argues that Mr Musk cannot back out of the deal.
The social media platform says that fewer than 5% of its monetizable daily active users (those who are able to look at adverts) are bots. Mr Musk argues it could be many times higher.
Twitter is currently valued at $32bn, considerably below the $44bn offer from Mr Musk.
Today's vote could have spelled the end of Twitter's legal pursuit, but shareholders have now given the company the green light to pursue Mr Musk in court.
The two are set to meet in front of a Delaware state court in October. During the hearing a judge will decide whether or not Mr Musk has to buy the company.
Just before the shareholder decision, Twitter whistle-blower Pieter Zatko was in Washington testifying before the Senate Judiciary Committee about alleged security flaws.
He told US lawmakers the firm was "misleading the public" about how secure the platform is.
The firm's former head of security on to say that Twitter was "a decade behind" security standards. Twitter says Mr Zatko was fired from his job, and that the claims are inaccurate.
Mr Zatko has previously supported Elon Musk's claim that the platform has more spam and fake accounts than it has admitted - though he didn't elaborate on this on Tuesday.
Last week, a judge said that Mr Musk's lawyers would be allowed to use the Twitter whistle-blower's testimony in court.
It largely focussed on national security issues - and is not officially connected with Mr Musk's attempt to pull out of the deal to buy Twitter.
JULY 13: It comes after Mr Musk announced he was walking away from his proposed $44bn (£37bn) takeover of Twitter on Friday.
He claimed Twitter had not given information about the number of fake and spam accounts on the platform.
Now Twitter has asked a Delaware court to order Mr Musk to complete the merger at the agreed $54.20 per Twitter share.
"Having mounted a public spectacle to put Twitter in play, and having proposed and then signed a seller-friendly merger agreement, [Mr] Musk apparently believes that he - unlike every other party subject to Delaware contract law - is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away," said the lawsuit.
The lawsuit went on to accuse Mr Musk of "a long list" of violations of the merger agreement that "have cast a pall over Twitter and its business".
Twitter chairman Bret Taylor tweeted that the microblogging site wanted "to hold Elon Musk accountable to his contractual obligations".
Mr Musk tweeted on Tuesday: "Oh the irony lol [laughing out loud]."
The lawsuit said Mr Musk had backed out of the deal because it "no longer serves his personal interests".
Mr Musk is the chief executive of electric car company Tesla.
The lawsuit said that after Mr Musk agreed to the deal, the stock market fell, along with Tesla shares.
"The value of Mr Musk's stake in Tesla, the anchor of his personal wealth, has declined by more than $100bn from its November 2021 peak. So [Mr] Musk wants out," it said.
"Rather than bear the cost of the market downturn, as the merger agreement requires, [Mr] Musk wants to shift it to Twitter's stockholders," it added.
Twitter's share price has fallen more than 8% in the past month, and in May tumbled from highs of more than $50 per share, as Mr Musk questioned the number of fake and spam accounts on Twitter and said the deal was "temporarily on hold".
On Friday, Mr Musk said he was pulling out of the deal, claiming a lack of information about spam accounts and inaccurate representations amounted to a "material adverse event".
He also said Twitter sacking executives meant it was not living up to its obligations.
In response, Twitter said it planned to pursue legal action to enforce the agreement, saying it was "committed to closing the transaction on the price and terms agreed upon with Mr Musk".
The original merger agreement includes a $1bn break-up fee.
Twitter has accepted Elon Musk's offer to buy the firm for $44 billion, according to a press release issued today by the company. Musk paid $54.20 per share for the firm, which was the same amount he offered on April 14th. Free speech is the backbone of a functional democracy, and Twitter is the digital town square where important issues affecting humanity's future are debated.
Musk said in a statement accompanying the announcement. "I also want to make Twitter better than it has ever been by adding new features, opening up the algorithms to boost trust, combating spam bots, and authenticating all people." In the press announcement, Twitter CEO Parag Agrawal praised the deal as well. In an accompanying statement, Agrawal added, "Twitter has a purpose and importance that touches the entire globe." "We are extremely proud of our teams and motivated by work that has never been more critical."
In an SEC filing on Thursday, Musk outlined his...
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