Thunderbolt on the world of social networks. American billionaire Elon Musk has decided to put an end to his plan to take over the Twitter platform. In a letter published by the Securities and Exchange Commission, the American federal body for regulating and controlling the financial markets, Mr. Musk’s lawyers assure that the social network has not respected the commitments made in the agreement, by not giving all the requested information on the number of fake accounts and spam.
Twitter has repeated in recent weeks that the number of fake accounts on its platform is less than 5%. The multi-billionaire and his team believe that the network is lying and that it affects the viability of his business – and therefore the value of the company.
“Twitter failed to comply with multiple terms of the agreement and appears to have provided false and misleading information upon which Mr. Musk relied to enter into the acquisition agreement”says the official letter, which also mentions recent layoffs of Twitter employees and the recruitment freeze.
After the filing of his purchase offer, Mr. Musk, who was to acquire the social network for 44 billion dollars (more than 43 billion euros), had already announced that he had doubts about the sincerity of a certain number of statistical indicators published by Twitter, including those on spam, fake accounts and the means put in place to limit their proliferation.
In early June, the group’s board of directors agreed to allow Mr. Musk access to the mountains of data needed to answer his questions on this subject, after the businessman had threatened, in a official document, to withdraw its offer. So the world’s richest man and his team set out to analyze this raw data to determine if the percentage of fake accounts actually represents less than 5% of Twitter’s daily active users.
The takeover project had provoked strong reactions among the company’s employees, most of whom were very critical of a potential new owner who, on several occasions, denounced Twitter as a social network leaning too far to the left. A claimed libertarian, Mr. Musk is one of the few Silicon Valley bosses – but he is now a resident of Texas – to have supported, in part, Donald Trump.
Twitter executives ‘confident’
For some observers, Mr. Musk’s reservations could have been aimed above all at lowering the purchase price of the company, or even at offering him a way out to escape a complicated and expensive purchase procedure.
Despite his immense personal fortune, the billionaire had to put in place a complex financial package to try to acquire Twitter, based in particular on large loans secured on Tesla shares, one of the companies he heads. However, the value of these securities had fallen following the announcement of the attempted takeover of Twitter, with investors considering that the automaker would no longer be Mr. Musk’s priority if he bought the social network – which had mechanically increased the loans requested by Mr. Musk.
By ending his commitment to buy Twitter, Mr. Musk exposes himself to significant legal proceedings. Both parties have agreed to pay a severance fee of up to $1 billion in certain circumstances. Twitter Chairman Bret Taylor said on Friday that the company would take legal action for “enforce the agreement” redemption.
“Twitter’s board is committed to completing the transaction at the price and terms agreed with Mr. Musk”assured Mr. Taylor in a tweet, specifying that the council was ” confident “ in his chance to prevail in court.
The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plan… https://t.co/09YGPGCbne