(CTN News) – Elon Musk threatened to walk away from a $44 billion bid to acquire Twitter on Monday, a sign that his plans to transform the social media platform may be unraveling.
Tesla and SpaceX attorneys threatened Twitter in a letter accusing the company of refusing to give them information about “spam bot” accounts. The volatile billionaire has become obsessed with such bots despite declining an opportunity to examine Twitter’s internal data a few months ago.
DID ELON MUSK BUY TWITTER?
As of yet. Elon Musk signed an agreement in April to take Twitter private for $44 billion. The deal has not yet closed. Moreover, Musk has increasingly expressed discomfort with it, suggesting that either he wants to negotiate a lower price or even walk away.
IS Elon MUSK GETTING COLD FEET?
Since Elon Musk signed the Twitter deal in April, there are several reasons why it may have lost its luster. Twitter stands by Musk’s agreed price of $54.20 per share, but since early May the stock has fallen by more than 25% below that level.
The difference between the deal price and the actual share price suggests that many investors don’t think this deal will go through.
CAN MUSK CALL THE WHOLE THING OFF?
Even though Elon Musk can’t unilaterally halt the deal, he has acted as if he can. He could be liable for a $1 billion breakup fee if he walks away.
Twitter could also sue him to force him to complete the acquisition on the agreed terms.
Musk can opt-out of the Twitter sale if the company causes a “material adverse effect,” or a change that negatively affects Twitter’s business or finances.
Musk may be focusing on the spam bot issue for this reason – even though he waived many of his rights to peek under Twitter’s hood when he signed the deal.