Musk Threatens To Cancel Twitter Acquisition Over Bots

Tesla, Inc. CEO Elon Musk is once again threatening to terminate his $44 billion deal to acquire Twitter, arguing in a filing with the U.S. Securities and Exchange Commission this month that Twitter’s alleged refusal to provide him with information needed “to facilitate his evaluation of spam and fake accounts on the company’s platform” is a “clear material breach of Twitter’s obligations under the merger agreement.”  

Musk vowed to defeat Twitter’s spam and fake accounts (also called “bots”) when announcing the deal back in April.  Twitter maintains that fake accounts represent less than 5% of all accounts on the platform, but Musk has been suspicious of that number, claiming in mid-May that the number is at least 20% and that the deal would not move forward until he had more information about the number of fake accounts.   

Some have interpreted Musk’s threats as a negotiating tactic to acquire Twitter for less than the current deal’s price of $54.20 per share.  Were Musk to walk away from the deal without a valid reason, he would be on the hook for a $1 billion penalty.