Tesla CEO Elon Musk is terminating his bid to purchase Twitter for $44 billion, sending a letter to the social media giant’s board on Friday stating that he is ending the acquisition.
The letter, a regulatory filing from attorney Mike Ringler, states that Twitter is “in material breach of multiple provisions” of their April 25 merger agreement, and “appears to have made false and misleading representations upon which Mr. Musk relied when” agreeing to purchase the company.
Twitter responded to Musk’s letter Friday, saying it would sue to uphold the deal, the Associated Press reported.
Musk’s letter states that Twitter is required to provide all the data that he requests, “for any reasonable business purpose related to the consummation of the transaction.” Since agreeing to the deal, Musk has argued that Twitter is undercounting fake “bot” accounts, and this “information is fundamental to Twitter’s business and financial performance.”
Musk claims that Twitter has not complied with its contractual obligations, according to the letter, posted on the U.S. Securities and Exchange Commission website.
“For nearly two months, Mr. Musk has sought the data and information necessary to ‘make an independent assessment of the prevalence of fake or spam accounts on Twitter’s platform,’” the letter reads. “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.”
According to the letter, Musk has been seeking information about Twitter’s process for auditing the inclusion of spam and fake accounts among is monetizable daily active users, or mDAU; Twitter’s process for identify and suspending fake accounts; board materials related to the company’s mDAU calculations; and materials related to Twitter’s financial condition. The letter states that Musk negotiated access to this data and information as part of his agreement to purchase the company.
Musk’s interest in buying Twitter dates back at least to March. In April, he confirmed that he’d partnered with the private equity firm Morgan Stanley to fund the purchase. Twitter leaders initially pushed back on Musk’s efforts, adopting a “poison pill” strategy to prevent a hostile takeover. Musk accused the board of breaching its “fiduciary duty,” which legally requires board members to act in the best financial interests of the company.
On April 25, after weeks of negotiations, Musk declared victory.
“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,” he wrote in a statement about his acquisition. “Twitter has tremendous potential — I look forward to working with the company and the community of users to unlock it.”
In June, Twitter’s board unanimously endorsed Musk’s takeover after he threatened to pull out of the deal due to the company’s alleged lack of transparency.
Musk promised to make Twitter a haven for free expression and transparency. He vowed to overturn former president Donald Trump’s Twitter ban, calling it “morally wrong.” While many cheered those efforts, many in the media and on the left fretted, at times hysterically.
CBS’s Norah O’Donnell worried that Musk’s “hands-off approach” might “make Twitter a haven for disinformation and hate speech.” Brian Stelter of CNN questioned if there would be a mass exodus from the social-media platform. “If you get invited to something where there are no rules, where there is total freedom for everybody, do you actually want to go to that party or are you going to decide to stay home?” he asked.
New York Times editorial board member Greg Bensinger called the prospective Musk-owned Twitter “a scary place.” Then–White House press secretary Jen Psaki stated at the time that “we’ve long talked about, and the president has long talked about his concerns about the power of social-media platforms, including Twitter, and others, to spread misinformation, disinformation, the need for these platforms to be held accountable.”
On his Twitter account, where Musk has more than 100 million followers, he made no comment Friday about his intention to back out of the purchase.