The Tesla boss announced in April that he wanted to take over Twitter and then called off the purchase in July, citing false statements about the number of bogus accounts on the platform.
(Photo: Reuters)
new York Elon Musk has sent another resignation letter calling off the Twitter acquisition. Musk’s lawyers said on Tuesday that facts had come to light that provided an additional and clear basis for ending the acquisition. These were known to Twitter before the first cancellation of the $ 44 billion takeover, but were not published.
Twitter shares fell nearly 3 percent in premarket US trading on Tuesday to $38.99, further away from the Tesla CEO’s original asking price of $54.20
An additional resignation letter was sent in the event that the first resignation letter, dated July 8, was deemed invalid, Musk said. According to a court filing on Monday, Musk sought information from Twitter’s former security chief about spam account tracking.
Peiter Zatko, the former head of security, accuses Twitter of falsely claiming it has a solid security plan and prioritizing user growth over reducing spam.
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Musk announced in April that he wanted to take over Twitter for around $44 billion and then called off the purchase in July, citing false statements about the number of bogus accounts on the platform. He also refused to pay the previously agreed $1 billion breakup fee.
The US short message service has sued Musk and wants to ensure that Musk completes the takeover at the agreed price. The trial is scheduled to begin on October 17 in the US state of Delaware. Twitter accuses Musk of sabotaging the deal because it no longer serves his interests.
According to Wedbush analyst Dan Ives, the whistleblower’s statements make the Twitter case “more complicated”. All eyes are now on the Delaware trial, he wrote on Tuesday. Both legal teams are preparing for an “unprecedented fight over the $44 billion Twitter deal.” Zatko’s testimony could give Musk “a much-needed little win.”
>> Read also: Weak Security on Twitter? Ex-employee raises serious allegations
Musk’s legal team has subpoenaed Zatko to testify in the Delaware court on Sept. 9. “Importantly, Zatko claims that Twitter does not have an accurate count of the number of spam and fake bot accounts on its platform. That will be a priority for the Musk team,” said analyst Ives. In particular, the timing of the Zatko statement plays Musk into the cards.
There are a number of possible outcomes of the case, including a settlement, a $1 billion breakup fee to be paid by Musk, a forced deal, and a variety of other outcomes, Ives said. “For now, Twitter stocks continue to trade on deal odds as the long and ugly legal battle now plays out in the Delaware courts.”
A likely scenario is Musk settling with Twitter out of court and buying the platform at a lower, renegotiated price in the $50 range, the analyst believes.
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