Musk Walks Out of $42B Twitter Deal Claiming False Information

Elon Musk is withdrawing his $42 billion bid to takeover Twitter and claims the social media giant has provided false and misleading information.

A filing with the U.S. Securities and Exchange Commission, states that Musk believes that Twitter is in material breach of multiple provisions of the deal and had essentially made false and misleading representations.

Musk had in May already put the transaction on hold for suspicions that the actual number of fake or spam accounts was much more substantial than the 5% disclosed by the Twitter board.

Having requested accurate data in repeated requests over the past two months, Twitter had still failed to provide much of the data and information. According to the filing this includes “Information related to Twitter’s process for auditing the inclusion of spam and fake accounts” and “Information related to Twitter’s process for identifying and suspending spam and fake accounts.”

In an official announcement today, Musk’s attorney clarified that the Tesla and SpaceX CEO is convinced that the actual number of bots on the social media platform is significantly higher than 5%. He said:

“Preliminary analysis by Mr. Musk’s advisors of the information provided by Twitter to date causes Mr. Musk to strongly believe that the proportion of false and spam accounts included in the reported mDAU (monetizable daily active user) count is wildly higher than 5%.”

Twitter is not just letting Musk walk away from the deal and in response stated it was “confident” in the agreement and that it still plans to close the deal at the agreed-upon $54.20 per share price. It said:

“We are committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plan to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery.”