Published: July 13, 2022
Elon Musk backed away after claiming that Twitter had not provided enough information about the site’s number of fake accounts and spam. As a result, Twitter Inc. shares fell on Monday after he withdrew his $44 billion buyout offer, setting the stage for a legal battle.
The share price closed at $32.64 on Monday after Elon Musk backed out of the deal to buy the company and take it private. The microblogging platform has traded below Musk’s April offer of $54.20-per-share.
According to the billionaire, the company misrepresented user data, claiming that the platform’s number of spam bots is higher than Twitter has disclosed. Furthermore, as interest rates rise, the stock has fallen along with the rest of the tech sector.
Mr. Musk tweeted that Twitter must “disclose bot information” in court. Twitter intends to take legal action to force the deal through and has hired a top New York corporate law firm, Wachtell Lipton Rosen & Katz, to do so.
Elon Musk, also Tesla’s CEO, announced plans to buy Twitter in April, but the deal was put on hold in May due to the arising issues connected with the number of fake accounts on the platform.
However, the company has denied his claims, insisting that bots account for less than 5% of users. Also, the executives confirmed that their estimates were accurate. However, Musk believes it could be 20% or more users.
On the other hand, litigator Ann Lipton thinks that Musk is only finding a way out of the Merger since Tesla’s stock price also dropped. She further said that it might have impacted his wealth, considering he is the wealthiest man in the world. Musk has no comment about this.