Elon Musk is officially backing out of the $44 billion deal to takeover Twitter . This latest development has been made official by the Securities and Exchange Commission (SEC) filing made by the Tesla CEO's legal team.
In response, Twitter has is planning on suing Musk for backing out, according to a statement made by the company's chairman.
Here is what we know:
Elon Musk Officially Backs Out of Twitter Takeover
Twitter edit button is finally here! And no, it’s not because of Elon Musk.
Elon Musk, the billionaire who owns Tesla and SpaceX, among others, has officially declared he does not want to buy Twitter any longer.
According to a report by Engadget, the billionaire's legal team made an SEC filing and said that "the Tesla CEO wishes to terminate the agreement because of 'false and misleading representations' made by Twitter."
It is being assumed that the false and misleading representations being pertained to involve the number of fake accounts and bots on the platform and how the social media giant counts them. Musk's legal team has accussed the company of withholding information regarding the matter and misleading the Tesla CEO.
Engadget states in its report that Twitter has insisted that fake accounts make up only less than 5% of the app's total daily users. The company also says that it has turned over a number of data to Musk to prove their claims.
However, Musk's legal team says in the SEC filing that Twitter is "dramatically understating" the number, adding that preliminary analysis made by the billionaire's advisors on the provided data shows that the number is much higher.
Related Article: Elon Musk Puts Twitter's $44 Billion Deal 'On Hold' Following Pending Details on Fake Accounts
Twitter Plans to Sue Elon Musk for Backing Out
Twitter has already responded to Musk officially backing out of the $44 billion deal and, according to The Verge, the social media giant is planning to sue.
According to a tweet by Twitter Chairman Bret Taylor, "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." You can view the full tweet below:
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. We are confident we will prevail in the Delaware Court of Chancery.
— Bret Taylor (@btaylor) July 8, 2022
Terminating the deal has a hefty cost for the Tesla CEO as The Verge's report points out that both Musk and Twitter have agreed to pay a $1 billion termination fee should either party back out for specific reasons.
"Musk agreed to pay the fee if he isn't able to secure the funding he needs to complete the takeover - which, so far, he hasn't," The Verge's report states. It also notes that the fee has not been mentioned in the SEC filing made by Musk's lawyers.
