In late April, Elon Musk and Twitter closed a deal that will see the Tesla mogul taking over majority ownership of the social media company for $44 billion. Last week however, Musk announced putting the Twitter deal on hold, indicating a possible walk back on the Twitter acquisition deal. The move has put Twitter at a disadvantage, which could lead to a legal battle or force it to agree to a renegotiation of the acquisition price.
Why Musk is Walking Back on the Twitter Acquisition
Musk contends that it has come to his knowledge that about 90% of the accounts making up the Twitter social media site are spam accounts. If that is the case, Musk feels he has been misled, and concluded that the social media site is not at all worth $44 billion. Although Musk said he is still interested in buying up the company’s shares of stocks, he wants to renegotiate the price. If not, he is willing to pay $1 billion as “breakup fee.”
According to Musk, he considers Twitter as an important venue where free speech is essential to the future of humanity. The multi billionaire said he is excited about making improvements on the social media platform and of working with the users of Twitter accounts. However, as it is, he found out aht nearly 90% of the accounts making up the platform are considered spam.
Many are questioning the legality of Musk’s action as his reversal can impact the value of Twitter’s stock shares.
Apparently, Twitter can sue Elon Musk for breach of contract, to cost Musk more than just a billion dollars for nothing. However, many see the hold action as Musk’s strategy in bringing down the acquisition price. After all, for Twitter, renegotiation is also the cheaper alternative to filing a lawsuit against Musk.