(CNN) – Elon Musk wants to back out of a $44 billion deal to buy Twitter, the latest in a dizzying process in which the billionaire CEO of Tesla has become the company’s majority shareholder, declined a board seat, agreed to buy the social networking platform, and raised doubts about continuing to do so. the agreement. The next chapter of the saga will almost certainly be a court battle.
In a letter to Twitter’s chief lawyer, Musk said he was ending the deal because Twitter was “violating multiple terms” of the original deal, which was signed in April, according to a regulatory filing.
For weeks Musk has expressed concern, with no clear evidence, that there are more bot and spam accounts on the platform than Twitter has publicly stated.
Analysts have speculated that the concerns may be an attempt to create an excuse to get out of a deal that you may now consider expensive, after shares of Twitter and the broader tech market tumbled in recent weeks. Shares of Tesla, which Musk planned to rely on in part to fund the deal, have also fallen sharply since agreeing to the deal.
“Twitter’s board is committed to closing the transaction at the price and terms agreed with Mr. Musk and plans to take legal action to enforce the merger agreement,” He said in a tweet Twitter Chairman Brett Taylor on Friday, echoing the company’s previous statements. He plans to close the deal. “We are confident we will prevail in Delaware Chancery Court.”
Twitter shares fell nearly 6% in after-hours trading on Friday immediately after the news, having finished the day 5% lower. Tesla shares gained more than 1% in post-close trading.
Musk said in May that the deal was “on hold” while he assessed the amount of spam and fake accounts on the platform, reversing previous statements that he wanted to get Twitter to root out bots on the platform. Last month, he directly threatened to pull out of the deal, accusing Twitter of violating the merger agreement by not providing the data he says it needs to assess the amount of spam and fake accounts on the platform. In response, Twitter agreed to hand over his stream of tweets.
However, Musk’s lawyer claimed in a letter Friday that Twitter “failed to fulfill its contractual obligations” to provide Musk with sufficient data, saying that Twitter “appears to have made false and misleading allegations made by Mr. Musk” when accepting the deal.
“Nearly two months ago, Mr. Musk sought to obtain the data and information needed to ‘make an independent assessment of the prevalence of fake accounts or spam on the Twitter platform,’” reads the Friday letter. “This information is critical to Twitter’s commercial and financial performance and is necessary to complete the transactions under the Agreement. merger.”
And she continues: “Twitter has failed or refused to provide this information. Twitter sometimes ignored Mr Musk’s requests, sometimes denied them for seemingly unjustified reasons, and sometimes claimed compliance while providing Mr. Musk with incomplete or unusable information.”
This is an evolving story.