Twitter’s future is uncertain as Elon Musk pulls out of the acquisition.
On Friday, Elon Musk, billionaire and most influential Dogecoin lover, revealed that he is pulling out of the deal to acquire Twitter as the social media platform failed to meet contractual terms on providing data on spam activity on the platform, according to multiple sources.
“Twitter is in material breach of multiple provisions of that Agreement, appears to have made false and misleading representations upon which Mr. Musk relied when entering into the Merger Agreement,” a filing by Musk’s legal team read as reported by Reuters.
It is worth noting that the deal has been one of the most anticipated and closely watched this year. More so, as it took some time for the Twitter board to agree to the sale.
However, Musk in May revealed that he was putting the deal on hold till the company submitted the data it had on spam activity on its platform. Musk revealed that he suspected the company misrepresented the data by claiming that spam bots made up less than 5% of the users.
“It seems Twitter is ‘dramatically’ understating proportion of spam accounts represented in active user count. Twitter has either ignored or rejected requests for further information,” tweeted Fox Business reporter Eleanor Terrett attributing the statement to Musk trying to explain why the firm has yet to provide the required data.
It is worth noting that Elon Musk’s pending deal with Twitter had supported the share price of the social media platform in this increasingly difficult time for tech shares considered risky assets. Consequently, pundits expect the shares to plummet following the latest announcement. Meanwhile, Twitter has revealed that it plans to take Musk to court.
“The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery,” tweeted Bret Taylor, board chairman.
The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery.
— Bret Taylor (@btaylor) July 8, 2022
Notably, the deal has also affected the price movements of the popular meme coin Dogecoin. Announcements of the deal edging closer had often caused the token price to rise as investors speculated that the Dogecoin evangelist would integrate it as a currency on the platform for tipping features like Bitcoin, something reports said Musk had hinted at during a meeting with the Twitter board.
So far, Dogecoin is 5% down from highs of $0.07301 formed yesterday, currently exchanging hands for $0.06949 on mainstream exchanges.