Elon Musk Pulls Out Of $44 Billion Twitter Deal, Now Faces A Legal Threat

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Elon Musk terminating the deal that he inked in April to buy the social media giant sets the stage for a court battle over a breakup fee and more.

Elon Musk says he's withdrawing from his $44 billion deal to buy Twitter, throwing the social media company's immediate future into doubt.

In a securities filing on Friday, Musk accused Twitter of lying about the number of bots and spam accounts on the platform, as well as failing to provide material he asked for. That includes detailed data on the number of bot and spam accounts on Twitter, the company's methodology for calculating user numbers and backup materials detailing its financial valuation.

"This information is fundamental to Twitter's business and financial performance and is necessary to consummate" Musk's buyout, 

The letter said. "Twitter has failed or refused to provide this information. Sometimes Twitter has ignored Mr. Musk's requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr. Musk incomplete information."

The letter goes on to claim that, despite Twitter's alleged stonewalling, Musk's advisors analyzed the number of bots on the platform and determined that Twitter lied about their prevalence.

The true number of bots on the platform "is wildly higher than 5%," the letter said, citing preliminary analysis by Mr. Musk's advisors of the information provided by Twitter to date."

Twitter has maintained that fewer than 5% of users are spam or fake accounts for as long as it has been a public company.

Musk said he notified Twitter of its lapses on June 6, meaning the company's time to hand over the information he demanded is now expired, according to the letter.

Twitter's board chair, Bret Taylor, said that the company would pursue legal action to force Musk to complete the sale.

"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," Taylor said on Twitter.

Twitter's board approved the buyout two weeks ago.

Under the acquisition agreement, Musk is on the hook for a $1 billion termination fee if the deal falls through.