Elon Musk changed his mind about buying Twitter: now he faces a fine of $ 1 billion

Billionaire Elon Musk said that pulls out of agreement to buy Twitter. The agreement was valued at $44 billion. Now the company intends to sue Musk to enforce it. The edition told in more detail with the BBC.

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Court filings by Musk's lawyers say the company did not provide him with details about the number of fake accounts that exist on the platform.

Twitter shares fell 6% amid news of the billionaire's withdrawal from the agreement, which was announced in April this year.

Company chairman Brett Taylor responded by saying the company plans to go to court to enforce the agreement.

“Twitter's board of directors intends to close the transaction at the price and terms agreed to by Mr. Musk and plans to pursue legal action to enforce the merger agreement. We are confident that we will prevail in court,” Taylor wrote.

Why did Musk change his mind?

Initially, when he wanted to acquire Twitter, the company opposed it. When they changed their minds and decided to conclude a deal, Musk himself began to have doubts - because of the fake accounts.

The billionaire's lawyers said in a statement that Twitter was unable or refused to respond to multiple requests for information about fake or spam accounts on the platformwhich is of key importance for the company's business performance.

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Lawyers allege that Twitter violated the deal and made false statements that Musk was relied upon to make the deal.

Earlier, the entrepreneur threatened to cancel everything if the management of the social network did not prove to him that fake and spam accounts make up no more than 5% of users.

In an official letter sent to regulators in June, Musk wrote that, as a buyer of the company, he has the right to independently evaluate the number of spam user accounts.

Lawyers for the businessman claim that Twitter violated the terms of the sale agreement in this way.

However, the company insisted that its estimates of the number of spam accounts are correct, although, according to Musk, there are significantly more fake accounts on the social network than the officially stated less than 5% of daily users.

However, Musk claimed that up to 20% of Twitter accounts could be fake.

Elon Musk became the largest shareholder of Twitter in April, having immediately bought out 9,1% of the company's shares. The deal was valued at $2,64 billion, putting Twitter's total valuation at almost $30 billion.

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The businessman said that he was ready to buy the remaining shares at an even higher price - $54,2 each, and this raised the transaction amount to a record $44 billion.

But after the businessman agreed to buy Twitter on April 25, the stock fell for several days as investors speculated that Musk might back out of the deal.

The contract requires Musk to pay Twitter $1 billion in compensation if he is unable to complete the deal for reasons such as failure to pay for it or regulators blocking the deal. However, this does not apply if he breaks the deal himself.

Musk's decision is likely to lead to a lengthy lawsuit.

“This is a catastrophic scenario for Twitter and its board of directors, as the company now faces a lengthy legal battle,” summarized Wedbush analyst Daniel Ives.

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