- Elon Musk walks out of his Twitter takeover deal - Musk accuses Twitter of failure to provide data on bots and spam account - Twitter said it plans to pursue legal action to enforce the agreement. - Elon`s decision stands to affect the crypto industry.
The world’s richest man and Tesla`s CEO Elon Musk shocked the business world by announcing his plan to cancel the $44 billion Twitter deal in an unexpected twist of events. The news was communicated via a letter addressed to Twitter’s board of directors. In a nutshell, the world’s richest man is unsatisfied with Twitter’s lack of information about spam and fake accounts.
Elon Musk has withdrawn from a $44 billion buyout of Twitter. He says that Twitter broke several clauses in the agreement. Musk and his legal team state that Twitter made false and incorrect representations that Musk used as a basis for his decision. Elon says he withdrew because Twitter failed to provide enough data on its network’s amount of spam and phony accounts. Elon Musk had previously agreed to buy the crypto-friendly social media network for $54.20 per share, or about $44 billion in cash.
Musk writes to the SEC claiming that Twitter was not transparent about two key data: 1 - How it audits the inclusion of spam and fake accounts in monetizable daily active users (mDAU). 2 - How it detects and suspends such accounts. Twitter has been notoriously secretive about its daily mDAU counts for the last two years. The letter claims Twitter is in breach of two sections of the merger agreement (Sections 6.4 and 6.11). Elon Musk accuses Twitter of delay in providing the necessary information for two months.
After the withdrawal, Twitter`s board of directors is furious with Elon Musk’s decision to terminate the deal. In a tweet, Twitter chairman Bret Taylor wrote that the board wants to complete the transaction at the agreed-upon fee and will take legal action if necessary. The outcome of the matter remains uncertain.
The crypto industry remains affected by any financial decision by Elon Musk. Already a crypto enthusiast, Elon Musk substantially improved the crypto ecosystem by investing in Twitter. The billionaire gained support for the buyout from 19 renowned investors. These investors include crypto sections such as Sequoia Capital, Andreessen Horowitz, and Binance.
The partnership announcement has been a major catalyst for Dogecoin‘s price growth in recent weeks. According to the report, investors anticipate that the Dogecoin evangelist will integrate it as a currency on the platform for tipping features such as Bitcoin. Dogecoin has lost 5% of its value from the all-time high of $0.07301 set before, changing hands for $0.06949 on major exchanges at the time.
The project’s cancellation comes amid reports that the US SEC and FTC are looking into Musk’s ownership of the social network. The cancellation of the Twitter partnership had a major impact on other cryptocurrencies. On Friday, aftermarket trading in Twitter shares plummeted.
Twitter shares closed at $36.81 per share on Friday, sharply lower than Musk's $54.20 per-share offer.