Twitter: Elon Musk cancels $44 billion takeover bid
After the cancellation of the takeover by Elon Musk, the social network Twitter enters into a legal battle with the American multimillionaire.
Elon Musk, CEO of Tesla and SpaceX, is terminating an agreement to buy Twitter because the social network, which allows users to send free micromessages called tweets, violated several points, including official checks for fake accounts and spam accounts (5% according to public documents versus 20% according to the richest man in the world). Following the big announcement, Twitter chairman Bret Taylor said the board plans to take legal action to enforce the agreement.
BREAKING: Elon Musk says he is terminating his $44 billion Twitter deal https://t.co/X1qiGld4bM pic.twitter.com/6gTTyn6yFV
In a statement to the Securities and Exchange Commission (SEC), the federal regulator of the US financial markets, Elon Musk also said he was resigning because Twitter fired top executives and a third party from its talent recruiting team, thus violating Twitter’s obligation on the preservation of the material elements of his current business organization almost unaffected.
Twitter is in trouble because of Elon Musk
Shares of Twitter fell 6% to $34.58 in the stock market. That price is 36% lower than the $54.20 per share that Elon Musk agreed to buy Twitter for last April. Shares of the social network rose after Elon Musk bought a stake in the company in early April, protecting it from a deep stock market sell-off that has affected other social media platforms. But after an agreement was reached to buy Twitter on April 25, shares began to fall for several days as investors speculated that Elon Musk might pull out of the deal.
After a recent drop, Twitter stock is trading at its lowest level since March last year. The acquisition contract requires Elon Musk to pay Twitter a $1 billion severance package if he fails to close the deal for reasons such as failed acquisition financing or regulatory blocking of the operation. The fee, however, will not apply if Elon Musk terminates the agreement of his own free will.
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