Elon Musk Pulls The Plug On Twitter, Discontinues His $44 Billion Deal To Buy Twitter On Friday

Elon Musk Stops His $44 Billion Deal To Buy Twitter On Friday.

Musk said he had backed out because Twitter failed to provide enough information on the number of spam and fake accounts.

Musk is accusing the company of “misleading” statements about the number of fake accounts, a regulatory filing showed.

In a letter filed with the US Securities and Exchange Commission, Mr Musk's lawyer said Twitter had failed or refused to provide this information.

"Sometimes Twitter has ignored Mr. Musk's requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr. Musk incomplete or unusable information," the letter reads.

Musk terminating the deal that he inked in April to buy the social media giant sets the stage for an epic court battle over a billion-dollar breakup fee and more.

“Mr. Musk hereby exercises (the) right to terminate the Merger Agreement and abandon the transaction,” his lawyers said in a letter to Twitter, a copy of which was filed with the Securities and Exchange Commission.

Musk’s change of heart about buying Twitter appeared to suggest some “buyer’s remorse” for offering a price of $54.20 per share that now appears “laughable,” CFRA Research senior equity analyst Angelo Zino said in a note to investors before the deal was officially nixed.

Musk has said he believes number of accounts run by software instead of people to be much higher, Twitter, maintain that it is not more than five percent. 

With a recommendation by Twitter’s board for shareholders to approve the buyout at a special vote, which was expected to be held in August. Elon Musk had to make a decision.

In May, Mr Musk said the deal was "temporarily on hold" as he was awaiting data on the number of fake and spam accounts on Twitter.

The billionaire businessman had asked for evidence to back the company's assertion that spam and bot accounts make up less than 5% of its total users.

Spam accounts are designed to spread information to large numbers of people and manipulate the way they interact with the platform. On Thursday, Twitter said it removed around 1 million such accounts each day.

Mr Musk believes that spam or bot accounts could account for 20% or more of Twitter users.

Shares in Twitter fell by 7% in extended trading after the announcement.

In a filing, Mr Musk said he'd repeatedly been refused information about the number of bot accounts on Twitter - which is why he wished to terminate the deal.

Elon Musk though has already put pen to paper on this deal, and it is not totally clear whether he can back out at this stage. Mr Musk will need to prove that Twitter breached their agreement.

Twitter says it plans to pursue legal action to enforce the agreement.