Elon Musk has begun the process of trying to completely walk away from his acquisition of Twitter — and Twitter is pushing back.
In a filing, Musk's lawyers claimed that Twitter did not respond properly or fully to multiple requests for information about the quantity of fake accounts on the platform. Musk's team asserts that the data is fundamental to the platform's business performance.
At stake is obviously the deal, but also a $1 billion kick-out fee that Musk must pay if the deal does not conclude. The legal filing to the SEC on Friday suggests that he should not be on the hook for that, alleging that Twitter did not cooperate.
Suits and counter-suits are expected to be filed shortly. It's not clear when any of this will lurch to a final conclusion.
In April, Twitter announced that it has accepted Elon Musk's offer to purchase the company for $44 billion, for $54.20 a share.
According to a report by Reuters on Friday afternoon, Twitter's shares fell 6% as a result. At time of publication, the stock is sitting at about $34.60 a share.
However, in May, Musk announced that he would temporarily halt his purchase of the social media while he sought to confirm how many accounts on the platform were spam accounts.
He then insisted that he would walk away from the deal if fake accounts comprised more than 5% of Twitter's total user base.
Bret Taylor, chairman of the board at Twitter, has announced that the company plans to pursue legal action against Musk for trying to back out of the deal.
The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery.— Bret Taylor (@btaylor) July 8, 2022