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The Elon Musk purchase of Twitter has now been put on hold because there are concerns that he can arrange new financing after he threatened to walk away from the deal.
He threatened to walk away from the deal because he said that Twitter is not providing him information about spam bots and fake accounts on the social media platform, Fox News reported.
“This is a clear material breach of Twitter’s obligations under the merger agreement and Mr. Musk reserves all rights resulting therefrom, including his right not to consummate the transaction and his right to terminate the merger agreement,” his attorneys said in a letter to Twitter on Monday.
Twitter said in a statement Monday that it has been cooperatively sharing information with Musk “in accordance with the terms of the merger agreement” and noted that the deal is in “the best interest of all shareholders.”
“We intend to close the transaction and enforce the merger agreement at the agreed price and terms,” it added.
Musk had threatened to put the deal on hold last month over his concerns over bots and fake accounts.
Musk tweeted that the deal was “on hold” in response to a story that showed Twitter claimed spam and bot accounts comprise less than 5 percent of its users.
“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users,” he said.
Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of usershttps://t.co/Y2t0QMuuyn
— Elon Musk (@elonmusk) May 13, 2022
Hours later he said, “Still committed to acquisition.”
Still committed to acquisition
— Elon Musk (@elonmusk) May 13, 2022
“Twitter Inc estimated in a filing on Monday that false or spam accounts represented fewer than 5% of its monetizable daily active users during the first quarter,” the Reuters story said.
“The social media company had 229 million users who were served advertising in the first quarter,” it said.
“The disclosure came days after Tesla Inc Chief Executive Elon Musk, who has inked a deal to buy Twitter for $44 billion, tweeted that one of his priorities would be to remove “’spam bots’ from the platform,” it said.
The news comes after it was reported this week that Twitter Chief Executive Officer Parag Agrawal is freezing hiring and taking other cost-cutting measures now that Elon Musk’s bid to purchase the company has been accepted.
The company will not make any new hires and could possibly rescind offers it has already made a company memo said, Bloomberg News reported.
Some exceptions will be made for business-critical roles, as determined by Twitter leadership. The company is also pulling back on costs such as travel, consulting, and marketing, according to the memo.
Agrawal said global events, including the war in Ukraine and the supply chain crunch, have hurt Twitter’s business results and may continue to do so. The company isn’t planning company-wide job cuts, “but leaders will continue making changes to their organizations to improve efficiencies as needed,” Agrawal wrote.
“At the beginning of the pandemic in 2020, the decision was made to invest aggressively to deliver big growth in audience and revenue, and as a company, we did not hit intermediate milestones that enable confidence in these goals,” the CEO said. “In order to responsibly manage the organization as we sharpen our roadmaps and our work, we need to continue to be intentional about our teams, hiring, and costs.”
And two of the company’s top executives, head of consumer product Kayvon Beykpour, and Bruce Falck, in charge of revenue, are both exiting the company.
“The truth is that this isn’t how and when I imagined leaving Twitter, and this wasn’t my decision. Parag asked me to leave after letting me know that he wants to take the team in a different direction,” Beykpour said on Twitter.
