Elon Musk, the co-founder and chief executive of Electric carmaker Tesla, gestures during a ceremony in Dubai on February 13, 2017. Tesla announced the opening of a new Gulf headquarters in Dubai, aiming to conquer an oil-rich region better known for gas guzzlers than environmentally friendly motoring. / AFP PHOTO / KARIM SAHIB (Photo credit should read KARIM SAHIB/AFP via Getty Images)
Billionaire Elon Musk moves away from the $44 Billion deal of buying Twitter
World Famous Personality and Billionaire Elon Musk was about to buy Twitter with a whopping deal of $44 Billion but now he has changed his mind and has decided to move away from this deal. This has raised a lot of questions and Twitter could sue Musk for backing out.
Elon Musk has called off his deal to buy social media company Twitter according to a filing on Friday with the Securities and Exchange Commission.
Skadden Arps attorney Mike Ringler said in a letter to Twitter’s chief legal officer that, “Twitter has not complied with its contractual obligations.” For nearly two months, the company has failed to provide Musk with information about fake or spam accounts, the letter said.
This news resulted in Twitter’s stock going down 5% after-hours trading. The stock has fallen sharply since the Twitter board accepted Musk’s offer to buy the company in April for $54.20 a share. On this day of the announcement. Twitter closed at $51.70 a share. On Friday, it closed at $36.81.
Musk is quite popular on Twitter where he has more than a million followers he frequently takes a dig at politics and he talks about business openly.
According to the filing with the SEC on April 25, the deal calls for Musk to pay Twitter a $1 billion breakup fee if he terminates the deal.
Musk may not be able to just walk away. Twitter may be able to force Musk to complete the deal, Many legal observers say.
At issue is whether the prevalence of bots on the social media platform is “fundamental to Twitter’s business and financial performance” as Musk’s lawyers have argued.
It will be interesting to see what will be the actual outcome of this whole fiasco.
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