Musk said Friday he would abandon his $44 billion offer to buy the social media company after its board refused to provide information about the number of fake accounts. The company said it would sue Musk to uphold the deal.
In a letter to Twitter’s board, lawyer Mike Ringler said Musk had been waiting nearly two months for data to determine the prevalence of “fake or spam” accounts on the platform, according to the Associated Press.
“Twitter has failed or refused to provide this information. Sometimes Twitter has ignored Mr. Musk’s requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr. Musk incomplete or unusable information,” the letter said.
Musk says the information is necessary to complete the deal and wont move forward without it.
While the sales agreement included a $1 billion breakup fee, the chair of Twitter’s board, Bret Taylor, tweeted that the board is “committed to closing the transaction on the price and terms agreed upon” and “plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery.”
The Delaware court handles many business disputes due to the large number of corporations which are incorporated there.
“This whole process has been bizarre,” said Christopher Bouzy, founder of research firm Bot Sentinel, which tracks fake Twitter accounts. He says Musk’s legal team makes some valid critiques of Twitter’s transparency issues, but also that Musk would have known about these issues from the start.
Shares of Twitter fell 5% on the news, while shares of Tesla jumped 2.5% to over $750 dollars.