Insider: Tesla boss Musk puts Twitter financing on hold - it could cost him billions
Created: 08/06/2022, 14:22
By: Lisa Mayerhofer
Elon Musk acquired Twitter in April 2022 for almost $44 billion.
© Andrea Ronchini/Imago
Does Elon Musk really want to take over Twitter?
The doubts are increasing - not only because of a new insider report.
The problem for Musk: He can't get out of the deal that easily.
SAN FRANCISCO -- Tech billionaire Elon Musk is increasingly trying to keep the way open for an exit from the deal to take over Twitter.
Apparently, his efforts to refinance the planned billion-dollar takeover of the short message service are also on hold, as the Reuters news agency reports, citing insiders.
Elon Musk: Exit from Twitter deal could cost him billions
The Tesla boss actually wants to use the new financing to reduce his cash share in the approximately $ 44 billion takeover.
At the same time, however, he also threatened to withdraw from his planned takeover of Twitter.
In a letter published on Monday by his lawyers to Twitter's chief legal officer Vijaya Gadde, it was said that the company refused to provide him with data for his own research on the number of spam and fake accounts.
This is a violation of the takeover agreement.
That's why he reserves the right to withdraw from the deal.
Musk has been trying since mid-May to address Twitter's allegedly false estimates of the number of spam and fake accounts.
He therefore already declared the takeover deal to be suspended.
From Twitter's point of view, however, Musk cannot unilaterally put the agreement on hold.
On Monday, too, the company emphasized in a statement in the Wall Street Journal, among others, that it was still determined to push through the takeover on the agreed terms.
The question of whether Musk's allegations give him sufficient reason to withdraw from the deal could ultimately be decided in court.
It's about a lot of money: According to the
Handelsblatt
, a penalty payment of one billion dollars has been agreed in the event of a unilateral exit from the takeover.
However, if the proportion of spam accounts on Twitter were well over five percent, Musk could exit the deal without penalty, according to the newspaper.
Takeover by Musk: Twitter estimates the proportion of fake accounts at less than five percent
Twitter itself estimates that fake accounts make up less than five percent of its user base.
The company speaks of 229 million daily users that the service can reach with its advertising.
The fake accounts identified by Twitter have already been deducted.
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Twitter boss Parag Agrawal also emphasized that the service blocks more than half a million spam accounts every day - usually before users see them.
Estimates of the number of fake accounts from outside the company cannot be made seriously, he warned.
Musk's lawyers wrote in their letter published on Monday that under the terms of the takeover deal, Twitter is required to provide data and information that Musk is requesting in relation to the transaction.
Contrary to what is shown by Twitter, this obligation to provide information does not only apply to very limited purposes, they argued.
Elon Musk's Twitter takeover: backing from Texas
Musk was backed by Texas Attorney General Ken Paxton, who announced an investigation into Twitter's claims about the number of fake accounts.
The company is now asked to provide information on this within three weeks.
Republican Paxton has long been at odds with Twitter and other online platforms.
He accuses them of suppressing conservative views.
A Texas law promoted by Paxton prohibited the online services from taking action against any user's expression of opinion.
A side effect of this would be that the platforms cannot remove hate speech, for example.
The law was suspended by the US Supreme Court.
Musk relocated the headquarters of Tesla, the electric car manufacturer he runs, from California to Texas and recently announced that he would vote for the Republicans in future elections.
(lma/dpa)
