Elon Musk is terminating the Twitter deal because the platform did not provide the necessary information to confirm the number of fake accounts. Twitter's refusal to release information critical to business valuation is a major setback and undermines the credibility of the company's management to investors.
Elon Musk refused to buy Twitter, as evidenced by his filing with the Securities and Exchange Commission. The filing states that on July 8, 2022, Musk's advisers sent a letter to Twitter formally notifying the platform that it was terminating the merger agreement. This followed a string of resistance from Twitter to provide the buyer with the relevant and necessary information he requested.
Musk's lawyers point out that Twitter was in material breach of the multiple provisions of the agreement. From what is known to date, Twitter may have misled everyone by providing false information about the actual number of spam/bot/fake accounts. For several years, the platform has claimed that its number is below 5%, although independent research and the experience of active Twitter users indicate a much higher number. In addition, the platform has not provided any evidence that the number of spam/bot/fake accounts is as claimed by it while claiming that no one but them can correctly calculate their number.
Twitter refused to provide any information on Musk's requested question and only responded after the buyer's team filed a legal request. However, instead of openly cooperating, the platform only provided data that were actually useless in counting the number of spam/bot/fake accounts. All known to the general public, the company's actions were aimed at hiding the truth about the reported number of fake accounts.
This behavior by Twitter management seriously undermines their credibility and calls into question what they care about in the interests of investors. While they could have cooperated in good faith and made the buying process go smoothly, they obstructed in every possible way from the very beginning.
© 2022, Eva Fox | Tesmanian. All rights reserved.
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Article edited by @SmokeyShorts, you can follow him on Twitter
About the Author
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.