Remember about six weeks ago when we reported about Elon Musk’s plan to buy Twitter? The deal that would have been for $44 billion? After several weeks and speculation, it appears that Musk is looking to pull out of the deal entirely according to a new SEC filing.
Musk’s team has asserted many times that Twitter has breached the terms of the takeover deal by refusing to provide more insight into the number of fake profiles on its platform.
This has been a major platform for Musk as to why he wanted to buy Twitter. He saw these fake profiles as a major issue and wanted to fix that problem as soon as the buyout was complete.
Twitter guessed that fake profiles made up approximately 5% of its active user count, but Musk doubted that number. He has publicly called out Twitter on many occasions about this topic, and now, he appears to be looking to use this as a means to back out of his takeover bid.
“Based on Twitter’s behavior to date, and the company’s latest correspondence in particular, Mr. Musk believes the company is actively resisting and thwarting his informational rights (and the company’s corresponding obligations) under the merger agreement. This is a clear material breach of Twitter’s obligations under the merger agreement and Mr. Musk reserves all rights resulting therefrom, including his right not to consummate the transaction and his right to terminate the merger agreement.”
Musk’s team says that, despite their repeated requests for more information, Twitter has refused to elaborate on their 5% figure, which Musk believes is far too low to be accurate. This lack of information would be tantamount to a breach of the deal terms, according to Musk’s team.
Twitter, on the other hand, does not see it this way. They have argued that its 5% fake profile figure is actually accurate. Their method of sampling and reporting has been accepted by the SEC in the past, which leads them to believe that it should be the agreed number under the terms of the deal.
According to Twitter:
“Twitter has and will continue to cooperatively share information with Mr. Musk to consummate the transaction in accordance with the terms of the merger agreement. We believe this agreement is in the best interest of all shareholders. We intend to close the transaction and enforce the merger agreement at the agreed price and terms.”
So is this deal going to end up happening or not? None of us really knows? Was this whole deal really meant to be for Musk to buy Twitter? Or was it just an elaborate way for Musk to bring attention to the bot problem Twitter faces? We might have our tinfoil hats on for that guess, but who knows?
Regardless of the outcome, we will keep you updated. Until that time comes, if you need help with any of your other social media management problems, reach out to us for a free consultation.