Elon Musk Wants Out Of Twitter Deal Due To Lack Of Information: $44B Buyout Off The Table

In a breaking update, Elon Musk has backed out of his deal to buy Twitter, Inc TWTR for $44 billion.

What Happened: An SEC filing from today has shared that Musk wants out of the deal after false and misleading information was shared to him from Twitter.

“As further described below, Mr. Musk is terminating the Merger Agreement because Twitter is in material breach of multiple provisions of that Agreement, appears to have made false and misleading representations upon which Mr. Musk relied when entering into the Merger Agreement, and is likely to suffer a Company Material Adverse Effect (as that term is defined in the Merger Agreement).”, Musk’s legal team stated in a letter dated July 8 to Vijaya Gadde, Chief Legal Officer of Twitter. 

Musk contends that multiple data requests made by him and his financial advisors at Morgan Stanley MS over the past several months have either been ignored, rejected or the data provided has been incomplete. 

Specifically, Musk believes that Twitter has repeatedly failed to provide data on monetizable daily active users (“mDAU”) so he could determine how many users were in fact fake or spam accounts. 

As a result, Musk and his attorney have determined that Twitter is in violation of multiple clauses of the merger agreement and therefore is electing to terminate the transaction.

Twitter chair Bret Taylor tweeted Friday afternoon that the board of directors intends to pursue legal action against Musk.

"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," he said. "We are confident we will prevail in the Delaware Court of Chancery."

Twitter stock is now down 6.25% (at the time of publishing) due to this event.