Elon Musk Says Twitter Deal ‘Cannot Move Forward’ in Current State

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Source is New York Times

In premarket trading, Twitter’s shares slipped further, falling 2 percent.

The company said in a statement accompanying a regulatory filing on Tuesday that it was “committed to completing the transaction on the agreed price and terms as promptly as practicable.” In the filing, which explains the background and rationale for the deal, Twitter said that “if the merger is not completed, and depending on the circumstances that cause the merger not to be completed, the price of our common stock may decline significantly.”

Mr. Musk, who also leads the electric automaker Tesla and rocket company SpaceX, has unleashed confusion over the state of the deal. Last Friday, he tweeted that his purchase of Twitter was “temporarily on hold” until he could get more details about the volume of spam and fake accounts on the platform. He later followed up saying he was still “committed” to the deal.

Twitter executives have become targets of Mr. Musk.

On Monday, Parag Agrawal, Twitter’s chief executive, posted a lengthy thread detailing how the company calculates its number of bots. He said the company had shared an “overview of the estimation process with Elon a week ago.” Mr. Musk responded to the thread with a poop emoji.

Last month, Mr. Musk went after Twitter’s top lawyer who oversees the platform’s content moderation policies. Mr. Musk’s supporters followed his lead by posting a flood of abuse at the company executive.

Mr. Musk did not immediately respond to a request for comment. Twitter declined to comment.

Tech company stocks have taken a beating since Mr. Musk first announced his acquisition of Twitter earlier this month. Shares of Tesla, which are Mr. Musk’s main source of wealth, have fallen almost 30 percent.

Renegotiating a deal would not be easy. In addition to a $1 billion breakup fee, Mr. Musk’s deal with Twitter includes a “specific performance clause,” which gives the company the right to sue him and force him to complete the deal so long as the debt financing he has corralled remains intact.

But Mr. Musk has also created very public headaches for Twitter. Over the weekend, he tweeted that Twitter’s legal department had “called to complain” that he violated a nondisclosure agreement discussing its bot sample size of 100. Mr. Musk’s deal with Twitter also has a nondisparagement clause that prohibits him from tweeting negatively about the transaction.

The two sides have so far continued as if there is a deal. Teams for both sides held a previously scheduled meeting on Friday. (Twitter confirmed the meeting was “part of the transaction planning process.”) On Friday, Bret Taylor, Twitter’s chairman, tweeted: “We remain committed to our agreement.

Mike Isaac contributed reporting.

Source is New York Times

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