The world’s richest man, Elon Musk, has backed out of his earlier $44bn offer to buy Twitter and is claiming the problem with the bots on the network as an excuse. Musk claims significant violations as the basis of his release from the contract.
He claims that Twitter has concealed information and lacked data about the number of false users and bots using the service. Musk has stated that this number is much more likely to be above 20%, while Twitter says that only 5% of its total users are bots.
This Musk criticism doesn’t really pass the smell test. That’s because Musk has been really outspoken about the issue of Twitter bots for a very long time. In fact, he made it his mission to eliminate false accounts right from the start of what could become a disputed bid to acquire the platform. He had tweeted back in April that if the Twitter bid succeeds, they are going to definitely spam bots or die trying.
It seems absurd now as he claims that bots are the deal breaker since one of his main goals in purchasing Twitter was to tackle the bot problem and facilitate a forum for free speech. That said, it is quite possible that Musk’s intentions for purchasing Twitter weren’t entirely noble.
It is also noteworthy that his willingness to back out of the contract coincides with the declines in Twitter and his electric vehicle firm, Tesla’s share prices. Musk’s personal wealth has been negatively damaged by the latter to the tune of over $65bn. Given these challenges, it’s likely that Musk no longer thinks Twitter is a wise decision for him.
Besides, bots pose a danger to Twitter’s ability to generate revenue. Musk has two reasons for wanting to leave this deal. One could believe him when he says that there are too many bots on the platform. The second decision is that buying Twitter at that point in time might have seemed like a wise decision. Spending $44bn on something that might not be as successful as he had hoped is a lot of money.
A breakup clause in the Twitter deal holds Musk accountable for a $1bn penalty if the transaction is not successful. Twitter is now suing him to make sure that the full purchase goes through. The social media platform is prepared for a fight and is justifiably irritated by the situation they have ended up in. September is probably when the trial is going to begin. Musk and Twitter’s relationship has grown incredibly poisonous, and in all likelihood, it seems impossible that they could find an amicable way out of this.
According to brand consultant Abhimanyu Mishra of Brandfizz, Twitter has a superior legal position. He asserts that Musk lacks the legal right to break the contract because the funding commitments for the acquisition are still in place and there are no obvious problems with the regulatory approval.
