esla Chief Executive Officer Elon Musk said on Friday, he was terminating his $44 Billion deal for Twitter, over the company’s refusal to release information about fake accounts.
Musk offered $54.20 per share in April. Shares of Twitter were down 7% in extended trading today.
Musk’s lawyers argued that Twitter failed or refused to respond to multiple requests for information on fake or spam accounts on the platform, which is fundamental to the company’s business output.
“Twitter is in material breach of multiple provisions of that Agreement, appears to have made false and misleading representations upon which Mr. Musk relied when entering into the Merger Agreement,” the filing said.
The announcement is another twist in a will-he-won’t-he saga after the world’s richest person clinched a $44 billion deal for Twitter in April but then put the buyout on hold until the social media company proved that spam bots account for less than 5% of its total users.
According to the terms of the deal, Musk is required to pay a $1 billion break-up fee if he does not complete the transaction.
Musk had threatened to halt the deal unless the company showed proof that spam and bot accounts were fewer than 5% of users who see advertising on the social media service.
The decision is likely to result in a long protracted legal tussle between the billionaire and the 16-year-old San Francisco-based company.
Twitter is yet to comment on the development.