Elon Musk Says He Will Terminate $44 Billion Twitter Buyout Deal

Elon Musk’s tumultuous $44 billion bid to buy Twitter is on the brink of collapse, after Tesla’s CEO sent a letter to Twitter’s board on Friday saying he would call off the takeover.

Twitter did not immediately respond to a message for comment. It’s not entirely clear if Twitter’s board will agree to the $1 billion breakup fee or if there will be a court battle over the deal.

The potential unraveling of the deal is just the latest twist in a saga between the world’s richest man and one of the most influential social media platforms. Much of the drama has played out on Twitter, with Musk, who has more than 95 million followers, lamenting that the company is not living up to its potential as a platform for free speech.

On Friday, shares of Twitter fell 5% to $36.81, well below the $54.20 Musk had offered to pay. Meanwhile, Tesla shares rose 2.5% to $752.29.

In a letter to the Securities and Exchange Commission, Musk said Twitter “has failed to meet its contractual obligations” around the deal, that is, it provided Musk with enough information to “make an independent assessment of the prevalence of fake accounts.” or spam on the Twitter platform”.

Musk’s flirtation with buying Twitter appeared to start in late March. That’s when Twitter said it contacted members of its board, including co-founder Jack Dorsey, and told them it was buying shares in the company and was interested in joining the board, taking Twitter private, or starting a competitor. Then, on April 4, he revealed in a filing with regulators that he had become the company’s largest shareholder after acquiring a 9% stake worth about $3 billion.

At first, Twitter offered Musk a seat on its board. But six days later, Twitter CEO Parag Agrawal tweeted that Musk won’t be joining the board after all. His offer to buy the company came through quickly after that.

Musk had agreed to buy Twitter for $54.20 a share, inserting a “420” marijuana reference into his offer price. He sold roughly $8.5 billion of Tesla stock to help finance the purchase, then leveraged commitments of more than $7 billion from a diverse group of investors, including Silicon Valley bigwigs like Oracle co-founder Larry Ellison.

Inside Twitter, Musk’s offer was met with confusion and low morale, especially after Musk publicly criticized one of Twitter’s top lawyers involved in content moderation decisions.

As Twitter executives prepared for the deal to go ahead, the company instituted a hiring freeze, halted discretionary spending and fired two top managers. The San Francisco company has also been laying off staff, most recently part of its talent acquisition team.

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