Elon Musk has announced he will back out of his tumultuous $44 billion bid to buy Twitter, leaving the deal on the brink of collapse. Tesla’s CEO sent a letter to Twitter’s board on Friday saying he was ending the acquisition. But Twitter doesn’t accept Musk’s statement. Twitter chairman Bret Taylor responded on Twitter that the board is “committed to closing the transaction on the price and terms agreed to with Mr. Musk and plans to take legal action to enforce it.” merger agreement. We are confident that we will prevail in the Delaware Court of First Instance.” Twitter could have pushed for a $1 billion breakup fee that Musk agreed to pay under those circumstances. Instead, it appears ready to fight to complete the deal, which the company’s board approved and chief executive Parag Agrawal has insisted he wants to complete. The potential revelation 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 100 million followers — lamenting that the company has failed to live up to its potential as a platform for free speech. On Friday, Twitter shares fell 5% to $36.81, well below the $54.20 Musk had offered to pay. Tesla shares, meanwhile, rose 2.5% to $752.29. Musk’s lawyer, Mike Ringler, wrote in the letter to Twitter on Friday that for nearly two months, Musk had been looking for data to judge the prevalence of “fake or spam” accounts on the social media platform. “Twitter failed or refused to provide this information. “Twitter has sometimes ignored Mr. Musk’s requests, sometimes denied them for what appear to be unjustified reasons, and sometimes claimed to comply by giving Mr. Musk incomplete or unused information,” the letter states. It also said the information is fundamental to Twitter’s business and financial performance and is necessary to complete the merger agreement. “This is a disaster scenario for Twitter and its board,” Wedbush analyst Dan Ives wrote in a note to investors on Friday. He predicted a long legal battle from Twitter to either restore the deal or pay a $1 billion breakup fee set out in “From the beginning this was always a crazy to follow Twitter with a price tag of $44 billion for Musk and never didn’t make much sense for the street, now it ends (for now) in a twilight zone that ends with the Twitter board behind the wall and many on the street scratching their heads about what’s next.” On Thursday, Twitter sought to shed more light on how it counts spam accounts in a briefing with reporters and company executives. Twitter said it removes 1 million spam accounts every day. spam accounts account for well under 5% of the active user base each quarter. To estimate how many accounts are malicious spam, Twitter said it checks “thousands of randomly sampled accounts” using public and private data such as IP addresses, phone numbers, geographic location and how the account behaves when active to determine whether an account is real. Last month, Twitter offered Musk access to its “firehose” of raw data on hundreds of millions of daily tweets, according to multiple reports at the time, though neither the company nor Musk confirmed this. The private data, which is not publicly available and therefore not in the “firehose” data provided to Musk, includes IP addresses, phone numbers and location. Twitter said such personal data helps prevent real accounts from being mistakenly identified as spam. Ringler also alleged that Twitter violated the agreement when it fired its revenue product leader and general manager of consumers, as well as announcing the layoff of a third of its talent acquisition team. The sale agreement, he wrote, required Twitter to “seek and obtain its consent” if it deviated from the conduct of normal business. Twitter had to “maintain substantially intact the material elements of its current business organization,” the letter said. Musk’s flirtation with buying Twitter appeared to begin 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 that it was interested in either joining the board, taking Twitter private or starting a competitor. Then on April 4, it revealed in a regulatory filing that it 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 of directors. But six days later, Agrawal tweeted that Musk would not be joining the board after all. His attempt to buy the company came together quickly after that. Musk had agreed to buy Twitter for $54.20 per share, inserting a “420” marijuana reference into his offer price. He sold about $8.5 billion worth of Tesla stock to help finance the buyout, then stepped up his commitments to more than $7 billion from a diverse group of investors, including Silicon Valley heavy hitters like the Oracle co-founder , Larry Ellison. Inside Twitter, Musk’s offer was met with confusion and falling morale, especially after Musk publicly criticized one of Twitter’s top lawyers involved in content moderation decisions. As Twitter executives prepared to move forward with the deal, the company instituted a hiring freeze, halted discretionary spending and fired two top executives. The San Francisco company has also laid off staff, most recently a member of its talent acquisition team.
