Elon Musk shook the entire world when he got his $44 billion bid accepted for Twitter. However, things seem to be taking a U-turn now as he retreats from the agreement based on his suspicion that the site has more bots than Twitter is ready to admit.
The Washington Post recently reported that the Twitter deal is “in peril” based on three reliable anonymous sources. They told the publication that the billionaire’s intentions had changed as his side has “stopped engaging in certain discussions around funding” and isn’t looking for an agreement. Soon after that, a BBC report confirmed Musk’s decision to call the deal off.
According to the report, Musk is unhappy with the lack of evidence Twitter has provided him to back their claims of having less than 5% of bot accounts. According to the letter Musk’s lawyer wrote to the US Securities and Exchange Commission, Twitter has sometimes “ignored Mr. Musk’s requests,” “rejected them for reasons that appear to be unjustified,” and “claimed to comply while giving Mr. Musk incomplete or unusable information.”
As soon as the news of the Tesla CEO’s turnaround surfaced, Twitter Chairman Bret Taylor shared his stance. Taylor tweeted, “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. We are confident we will prevail in the Delaware Court of Chancery.”
By the way, Musk isn’t alone in attempts to buy one of the biggest social platforms globally as others like Larry Ellison, Andreessen Horowitz (the venture capital firm), Binance (the crypto exchange), Fidelity along with the state investment firm of Qatar are all also pitching a few billions as part of the effort to acquire Twitter.
The breach in agreement and a “drastic” change of the situation on the Twitter deal is around the corner as it is supposedly because of the issues relating to Twitter’s data regarding bots and spam, which isn’t verifiable.
The aforementioned report arrived after Twitter representatives had a conference call with the media sources claiming that their technology for detecting spam accounts and blocking bots is fine, setting up grounds for a showdown between its potential new owners and the company.
A few months ago, Twitter provided Musk’s team with access to the ‘firehose’ data to back up the claims that bot accounts represent a small fraction of 5 percent of its active user count.
The company granted the access after Elon Tweeted, saying the deal was “on hold”, and his lawyers sent the company a letter claiming that they were in a “clear material breach” of the acquisition deal by not granting access to such data.
Twitter has been claiming for months that it might not be possible for external sources to verify the number as it requires access to private information such as account data which the company can’t share without security concerns.
As laid down in the original document, a breach of agreement would result in $1 billion in compensation from one party to another. If Musk does decide not to proceed with the agreement, they could enter a legal battle over who’s at fault, and it may take some time to get the final verdict.