The never-ending saga has finally ended—although probably not.
Elon Musk filed notice late Friday that he will not be buying social media giant Twitter. According to the filing, Musk claims “Twitter has not complied with its contractual obligations” in regards to his $44 billion bid to buy the company.
While that seems like the end of the story, it undoubtedly won’t be. Musk waived due diligence in an effort to push the social media giant to accept his “best and final offer.”
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Twitter did accept, and now it likely sets up a long legal battle concerning just what obligation the company had in answering Musk’s inquiries since due diligence was waived.
Musk agreed to buy Twitter for $44 billion back in April. The deal came after a bizarre set of events that saw him first become Twitter’s largest outside shareholder and then submit an unsolicited bid to buy the company.
Twitter actually implemented a poison pill to ward off his interest, but it eventually agreed to sell to Musk.
Even after that odd sequence, things continued to delve into the surreal, with Musk tweeting out in mid-May his offer for Twitter was “temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users.”
In June, Musk threatened to withdraw from his agreement to buy Twitter in a new letter filed with the U.S. Securities and Exchange Commission. In that letter, Musk’s attorneys said Twitter refused to provide the data so Musk could perform his own analysis of the number of spam accounts the social media company had. Musk’s attorneys also filed subsequent letters afterward.
Now it will probably be up for the courts to decide as Twitter likely will try to force the deal through. Musk, who also serves as CEO of Tesla and SpaceX, also agreed to pay Twitter $1 billion were the deal to fall through, but he is now claiming “material adverse effects” that would relieve him of such a payment.
The news of the deal being called off did not help Twitter’s shares. Before it was reported Musk had pulled out, Twitter shares already were down 5% on Friday. Shares dropped another 6% in after-hours trading and were trading below $34.50.
Earlier today, it was also reported that Twitter had laid off nearly a third of its recruiting team.
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