Elon Musk wants to cancel his $44 billion purchase of Twitter. Social media companies are pushing for the deal to go ahead. The result is likely to be an extended legal battle in the Delaware Cancer Court to determine the future of the takeover.
Musk argues that Twitter has a much larger number of bot-controlled spam accounts from reports of social media companies. Musk claims that figure could be as high as 20 percent of site signups. Twitter put proportion close to 5 percent.
The Twitter team has not provided accurate figures on the number of bot accounts, according to Musk. He argued that not submitting the correct info was a reason to end the deal.
The purchase contract with Twitter includes a deal where Musk can cancel the deal by paying $1 billion in certain circumstances. For example, his debt financing for Twitter had to go.
As of this writing, Twitter stock is trading at $33.49 per share. Musk’s agreement will pay $54.20 per share for a total of $44 billion. The significant difference in value is why Twitter pushed Musk to finalize the deal.
According to reports from New York Time, going to court may be Musk’s strategy to bring Twitter to the negotiating table in a bid to lower the purchase price. It is also possible that a Delaware court found that Twitter did not violate the agreement but did not force Musk to buy the social media company. In that case, he would only pay damages.
Musk began his Twitter takeover effort in April. The first step is bought a 9.2 percent stake in the company for $2.89 billion. A few days later, he struck a deal to buy the remaining shares of the social media company.
Under Musk’s leadership, he don’t want to ban any user permanently. He also wants to give users the power to edit their tweets and receive cryptocurrency on the platform.