Elon Musk has pulled the plug on his $44billion Twitter takeover as he accused the firm of refusing to hand over details about the number of spam bots on its site.
The billionaire blasted the social media giant for refusing to ‘comply with its contractual obligations’ throughout the acquisition process.
He also claimed the company had failed to operate normally over the past two months as it froze its hiring process and fired senior staff.
But Twitter immediately hit back, with its chairman revealing the firm planned to force through the blockbuster takeover through the courts.
Bret Taylor tweeted the board was ‘committed to closing the transaction’ under the current terms of the deal and they were ‘confident’ they would win.
The bombshell update caused shockwaves across the business world, with the social media giant’s stocks sliding six per cent in extended trading.
It also came a day after Musk and Twitter CEO Parag Agrawal both appeared at ‘billionaire summer camp’ Sun Valley in Idaho – but it is not clear if they met.
Agrawal stood to make $42 million if the Musk deal went ahead.
The Tesla founder is expected to speak at the exclusive festival on Saturday morning but he was yet to publicly comment on walking away from the deal.
Speaking to NBC News about the collapsed deal, an anonymous Twitter employee said that Musk had ‘f**king destroyed the company.’
The world’s wealthiest man had earlier stalled on the deal after claiming that he wanted his team to do ‘due-diligence’ over the number of fake accounts on the platform.
Twitter CEO Parag Agrawal is set to come face-to-face with Tesla CEO Elon Musk on Saturday when Musk delivers the marquee address at the annual Allen and Company’s Sun Valley Conference, which Agrawal has been attending for the past three days
The employee said: ‘I guess it feels like we won. But it feels like the end of the movie, where the characters are bloodied and bedraggled with a Michael Bay explosion behind them. We could see this was coming, but in the meantime he’s f**king destroyed the company.’
During an all-hands meeting with employees in April, Agrawal attempted to quell employee anger after workers demanded answers to how managers planned to handle an anticipated mass exodus prompted by Musk.
In a letter to the Securities and Exchange Commission dropping the bombshell, Skadden Arps attorney Mike Ringler said that Twitter were in material breach of multiple provisions of the agreement.
Ringler wrote: ‘Twitter has not complied with its contractual obligations.’ He added also accused the company ‘of making ‘false and misleading representations’ when entering into the agreement.
It was previously reported that Musk would pay $1 billion if he backed out of the deal. Twitter could still attempt to hold Musk to the original deal or force a bigger payout from him walking away at the 11th hour.
The day before Musk’s bombshell, the Financial Times reported that Agrawal was prepared to go to war to make the deal go through.
The newspaper quoted a former Twitter executive as saying: ‘Parag wants to swing back more and is being more aggressive internally. It seems Twitter is willing to go to war to make this deal happen.’
The Financial Times also reported that Agrawal and Musk have a good relationship and were in weekly contact.
In a call with executives Thursday, Twitter said it removes 1 million spam accounts each day during a briefing that aimed to shed more light on the company’s fake and bot accounts as it tussles with Musk over ‘spam bots.’
Musk has argued, without presenting evidence, that Twitter has significantly underestimated the number of these ‘spam bots’ — automated accounts that typically promote scams and misinformation – on its service.
Twitter said on the call that the spam accounts represent well below five percent of its active user base each quarter.
To calculate how many accounts are malicious spam, Twitter said it reviews ‘thousands of accounts’ sampled at random, using both public and private data such as IP addresses, phone numbers, geolocation and how the account behaves when it is active, to determine whether an account is real.
Private data, which isn’t available publicly and thus not in the data ‘firehose’ that was given to Musk, includes IP addresses, phone numbers and location. Twitter said such private data helps avoid misidentifying real accounts as spam.
So far, there has only been a brief statement from Twitter on Musk pulling the plug
In a brief statement on Twitter, Chairman Bret Taylor said: ‘The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery.’
That message was later retweeted by Twitter CEO Parag Agrawal.
Musk and Agrawal are now set to once again come face to face at the Allen & Company Sun Valley Conference, where Agrawal, 38, has been attending private meetings for the past three days.
The annual invite-only, conference is hosted by the investment bank Allen & Company. This year, the five-day conference, running from July 6 to 10, is being held at the edge of Idaho’s Sawtooth National Forest in a tiny town of just 1,500 people.
Attendees of the conference include Bill Gates, Rupert Murdoch and Warren Buffet.
In a letter dropping the bombshell, Musk’s legal team said that Twitter were in material breach of multiple provisions of the agreement
Musk made the announcement Friday through his lawyer Mike Ringler
Last month, Twitter allowed Musk access to its ‘firehose’, a repository of raw data on hundreds of millions of daily tweets
One section of the letter reads: ‘Twitter has not complied with its contractual obligations. For nearly two months, Mr. Musk has sought the data and information necessary to ‘make an independent assessment of the prevalence of fake or spam accounts on Twitter’s platform.’
Musk’s legal team also accuses Twitter of ignoring and rejecting requests to data regarding fake accounts.
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.
Last month, Twitter allowed Musk access to its ‘firehose’, a repository of raw data on hundreds of millions of daily tweets.
The Tesla founder’s team discovered that the number of fake accounts on the side was much higher than the 5% that was publicly disclosed, Musk said.
In June, Twitter’s board voted unanimously to accept Musk’s offer.
Musk has not tweeted about the decision to pull the deal saying. In his last tweet which was on the day before the announcement the South African billionaire wrote: ‘Super fired up for future product development with our awesome Tesla team! Such an honor to work with them.’
Among those weighing in on the situation was Donald Trump Jr., who tweeted: ‘Elon musk is terminating his agreement to buy Twitter: So basically Twitter has a huge amount of spam accounts —way more than they let on — and has gotten busted for it!!! As I said weeks ago spam accounts are probably 50% not 5% of Twitter users.’
Musk and his Neuralink employee Shivon Zilis are seen touting the same flamethrower before she secretly gave birth to his twins as she also mocks Mark Zuckerberg and former Twitter CEO Jack Dorsey
In June, Twitter’s board voted unanimously to accept Musk’s offer
The news comes days after Musk confirmed that he secretly fathered twins with his employee, Neuralink director of operations, Shivon Zilis.
The couple’s children were born in Austin ,Texas, in November. Musk said that he fathered the twins in a tweet saying: ‘Doing my best to help the underpopulation crisis. A collapsing birth rate is the biggest danger civilization faces by far. Mark my words, they are sadly true.’
Since February, Musk has been in a relationship with Natasha Bassett, so it’s unclear that the status of his relationship with Zilis is.
The ice hockey-loving Yale graduate and AI executive ‘tipped to run Twitter’ after Musk buys it
The news comes days after Musk confirmed that he secretly fathered twins with Neuralink director of operations, Shivon Zilis, pictured above
Court documents have revealed that Elon Musk quietly had twins with Shivon Zilis, 36, the director of operations at Musk’s brain-machine interface company Neuralink.
Zilis, who was born in Ontario, Canada, met Musk through OpenAI, the artificial-intelligence research-and-deployment nonprofit Musk cofounded in 2015, Insider reported.
Zilis has been a board member at OpenAI since January 2020, according to her LinkedIn profile. She previously worked as an adviser at the company for three years.
She is also a Fellow at the Creative Destruction Lab, a startup focusing on the commercialization of science. She joined the company in 2015.
Zilis studied economics and philosophy at Yale where she also played goalie on the women’s ice-hockey team.
In 2015, Zilis was on Forbes’ 30 Under 30 list in the venture-capital category and in 2017, got the chance to use her AI expertise at Tesla.
Just last year, Zilis posted a nod to Prince Harry’s Silicon Valley startup with a throwback picture of the two of them from 2013 when she was asked to brief him on tech startups.
From 2017 to 2019, she was a Project Director at Tesla working on AI projects with a special focus on autopilot and chip design.
Zilis is currently the director of operations and special projects for Neuralink and has been floated as one of the people Musk could tap to run Twitter Inc after his $44 billion deal acquisition.