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On July 8, local time, Tesla CEO Elon Musk said that it would terminate the acquisition of Twitter, citing Twitter’s serious violations of several terms of the agreement, including the issue of fake accounts.
In a letter to Twitter’s chief legal counsel, Musk stated that the acquisition was terminated because Twitter was unwilling to share the information Musk requested, and the existing information proved that the number of fake accounts currently on Twitter far exceeds the company’s external statement. quantity. Musk believes that Twitter made false and misleading statements.
Not long after Musk’s statement was announced, Twitter responded by saying it would take Musk to court.
Twitter Chairman Bret Taylor said the board is committed to completing the transaction on terms agreed with Musk and plans to take legal action to implement the merger agreement, and Twitter is confident it will prevail in the Delaware Chancery Court.
Musk has been demanding that Twitter disclose the number of fake accounts. As early as May 17, Musk said that he would not proceed with the acquisition of Twitter until the Twitter CEO publicly proved that the number of fake accounts on Twitter was less than 5%. . According to Twitter’s performance report, Twitter’s fake accounts account for less than 5% of its total users.
On April 14, Musk sent Twitter a $44 billion takeover offer. Only 10 days later, Twitter officially announced that it had accepted Musk’s privatization. On April 25, Twitter announced that it had agreed to Musk’s acquisition agreement, which will buy Twitter for $54.2 per share, or about $44 billion in total. Shares of Twitter rose as high as $54.57 after the acquisition news.
Just as the outside world has begun to discuss how Musk will transform Twitter, uncertainty has poured in. During the period, Musk made many negative comments on Twitter, from business models to review policies. Musk later shelved the deal after questioning the proportion of fake accounts that Twitter disclosed itself. After a weeks-long stalemate, on June 8, Twitter finally compromised with Musk, saying it would provide a stream of tweets from all Twitter users.
It is worth noting that as Twitter’s stock price has fallen one after another, the spread to Musk’s previous offer of $54.2 per share in cash is continuing to widen. The stock price reflects the lack of confidence in the market’s successful completion of the transaction, with many market participants speculating that Musk is likely to abandon the $44 billion acquisition plan.
The New York Times has previously stated that Musk has been trying to withdraw from the transaction or renegotiate to obtain a lower price, and the stocks of U.S. stock technology companies have been frustrated, including Tesla, Musk’s main source of wealth. Since the announcement of the deal on April 25, Twitter shares have fallen nearly 30% and Tesla shares have fallen nearly 25%.
On the morning of June 16, local time, Musk held a question-and-answer session with more than 8,000 Twitter employees in the form of video for more than an hour. This is the first time he has communicated with employees since he expressed his intention to acquire Twitter. The New York Times wrote that Musk’s participation in this meeting means that he is preparing to complete this blockbuster acquisition. At the exchange meeting, Musk did not mention whether the market is most concerned about whether the acquisition transaction can be completed. And according to Bloomberg, no one at the scene asked Musk about this.
As of the close of U.S. stocks on July 8, Twitter closed down 4.85% to $36.91, and fell more than 12% after the market.
Source: The Paper
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