By: Economic & Finance Report
Welp that’s all folks!!!!!!! Elon Musk has officially canceled the Twitter deal. On Friday, July 8, 2022, Mr. Elon Musk formally announced that he no more wanted to acquire the social media giant. His lawyers indicated the lack of transparency of accounting, when it came to the bots and spam configuration; as some of the reasons of rescinding the deal.
Musk had indicated for months, that Twitter spam bots were excessive on the platform, and he wanted to obtain the figures and percentages; of how many bots were actually present on the platform. Twitter responded that they had given and were continuing to give Musk and his allies informational data about the spam bots and more. Twitter indicated they never relented and were indeed providing Musk the information he wanted and asked for. The Twitter board plans on suing Musk, to make sure the acquisition of Twitter does complete on the terms agreed upon by both parties.
Both sides can see problems ahead in litigation, because the litigation process would be lengthy and could drag out for a long period of time. Mr. Musk could be on the hook to pay a $1 billion termination fee, since the deal did not complete as planned. Twitter would also have problems on their hands because their stock has drastically fallen, lowering its market cap value. Both sides have indicated that they have acted in good and transparent faith, but both sides also allege there were many inconsistencies in the due diligence process.
Many experts have speculated that Mr. Musk was trying to find wiggle room to get out of the deal. Some observers have speculated that Musk never wanted to fully buy the social media platform in the first place. People believed this to be the case because of his combative nature while criticizing the leadership team at Twitter. Others have speculated that he was interested in buying the platform because he sold some of his Tesla stock to raise capital, and also had investor LOI’s from people such as Oracle’s Larry Elison, who was to assist with the financial funding of the deal.
At the very end the deal fell through, what else can you do? -SB
Image Source: Salon.com