The Washington Post reports:
Elon Musk said Tuesday his $44 billion bid to buy Twitter “cannot move forward” until the social media company’s CEO shows proof that less than 5 percent of the platform’s users are fake.
The Tesla chief executive’s tweet comes a day after he said he might try to renegotiate to pay less and accused Twitter of potentially misleading him about the percentage of fake accounts on the website, in the clearest signal yet that he could seek to exit the deal.
At a conference in Miami on Monday, Musk said a lower price was not “out of the question,” the latest indication that he may be distancing himself from his initial $44 billion offer, which was announced April 25.
Elon Musk can’t just walk away from his deal to acquire Twitter by paying an agreed-upon $1 billion breakup fee. It’s not that simple.
Musk and Twitter agreed to a so-called reverse termination fee of $1 billion when the two sides reached a deal last month. Still, the breakup fee isn’t an option payment that allows Musk to bail without consequence.
A reverse breakup fee paid from a buyer to a target applies when there is an outside reason a deal can’t close, such as regulatory intermediation or third-party financing concerns. A buyer can also walk if there’s fraud, assuming the discovery of incorrect information has a so-called “material adverse effect.”
20% fake/spam accounts, while 4 times what Twitter claims, could be *much* higher.
My offer was based on Twitter’s SEC filings being accurate.
Yesterday, Twitter’s CEO publicly refused to show proof of <5%.
This deal cannot move forward until he does.
— Elon Musk (@elonmusk) May 17, 2022