Fox Business reports that Elon Musk has told Twitter that he is terminating his deal to buy the company.
Musk did so through his attorney, who sent Twitter a letter on Friday. The letter informed the social media company that Musk is moving on from the deal. It also informed the company about why it is that Musk made such a decision.
According to Musk’s lawyer, it came down to “false and misleading representations” made by Twitter.
“Twitter has failed”
Musk’s lawyer, in the letter, accuses Twitter of not giving Musk the information he needed to “make an independent assessment of the prevalence of fake or spam accounts on Twitter’s platform.” This has been a point of contention between Musk and Twitter for the past month.
“This information is fundamental to Twitter’s business and financial performance and is necessary to consummate the transactions contemplated by the Merger Agreement because it is needed to ensure Twitter’s satisfaction of the conditions to closing, to facilitate Mr. Musk’s financing and financial planning for the transaction, and to engage in transition planning for the business,” Musk’s lawyer wrote.
The attorney added: “Twitter has failed or refused to provide this information.”
“Sometimes Twitter has ignored Mr. Musk’s requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr. Musk incomplete or unusable information,” the letter reads.
Musk’s lawyer added: “All indications suggest that several of Twitter’s public disclosures regarding its [monetizable daily active users] are either false or materially misleading.”
Twitter Chairman of the Board Bret Taylor responded to the letter with a tweet saying Twitter plans on using legal action to force the deal through.
“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,” Taylor wrote. “We are confident we will prevail in the Delaware Court of Chancery.”
If what Musk alleges is true, however, then Twitter likely is not going to be able to force the deal through.
Instead, the company probably ought to start gearing up for the inevitable shareholder lawsuits.