Elon Musk will withdraw from his $44 billion agreement to buy social media platform Twitter, the billionaire has stated, although it remains to be seen whether he may yet be forced to conclude the transaction.
Musk claims there have been multiple breaches of the agreement and he has backed out because Twitter failed to provide accurate information on the number of bots and fake accounts on the platform. Musk announced he was buying Twitter in April for $44 billion, in a deal which included a $1 billion break-up fee.
Twitter has said it will pursue legal action to enforce the original agreement. “The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk,” Twitter chairman Bret Taylor wrote in a tweet.
The disagreement over the number of fake accounts began in May when Musk said the deal was on hold as he waited for confirmation on the percentage of users on Twitter that were in fact bots. Twitter claimed less than 5% of users were bots, but Musk has since claimed they could account for 20% or more.
Musk’s lawyers filed a letter with the US Securities and Exchange Commission claiming he hadn’t received accurate information. “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,” the letter reads.
Bots have long been a problem associated with all social media platforms. They are fake profiles created to spam users with various materials, mostly marketing or political. When Musk first announced his intentions to buy Twitter, the bot problem was one of the things he said he wanted to fix.
Musk, a free-speech advocate, also wanted to ease content moderation rules on Twitter, and has spoken out about the ban on former President Donald Trump.
The legal battle will now rumble on for months, as Twitter looks to enforce the sale. In the meantime, analysts will argue over Musk’s true reasons for pursuing an end to the purchase. Given the fall in share price since the deal was announced, many believe Musk has overpaid, while others say the practicalities of changing the moderation laws have also dawned on him. Shares in Musk’s other companies have also dropped since he announced the Twitter deal.