Adding Another Twist To A Long-Running Saga, fake accounts concerns.
In an attempt to seek Twitter Inc. for $44bn (£36bn), the Space X boss Mr. Elon R. Musk pulled the plug on his bid to buy Twitter.
The pullout shakes up a half-year saga that began with Musk building up an equity stake, building up an elaborate financing plan, and then hitting a deal in April.
In the series of these events, the deal that Musk inked in April is set to terminate and the discrepancy over how much of the platform’s user base is made up of bots is almost certain to lead to a courtroom battle.
Musks’ team claims that he has canceled the Twitter deal because the social media giant was in “material breach” of their agreement and has made “false and misleading” statements about the number of fake accounts.
An excerpt from Musk/Twitter break-up filing says “For nearly two months, 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”.
Elon Musk claimed that Twitter has failed to provide more information about how it estimates the number of spam accounts on its platforms. The social media platform exclaimed that the number of false or spam accounts was less than 5% of its “monetizable” daily activity users.
The billionaire businessman has expressed doubts over Twitter’s claim that fake and spam accounts represent less than 5% of its total users. The multi-billionaire Musk had asked for evidence to back the company’s assertion of its strong claim.
Elon filed a letter with the US Securities and Exchange Commission (SEC), saying that Twitter had failed and refused to provide this information. In the letter filed, the excerpt says
Sometimes Twitter has ignored Musk’s requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Musk incomplete or unusable information.
On Thursday, Twitter notified it was removing around 1 million spam accounts each day. Musk believes that spam or bot accounts could account for 20% or more of Twitter users. Elon’s team also claims that Twitter violated the agreement when it fired two of its top executives and adopted a hiring freeze because the company did not seek permission to deviate from its “ordinary course” of business.
Bret Taylor, chairman of Twitter’s board of directors, tweeted Friday that the company is still committed to closing the transaction on the price terms agreed upon with Musk and plans to pursue legal action to enforce the merger agreement. He further said,
We are confident we will prevail in Delaware Court of Chancery.
Elon Musk also claims that the social media company hasn’t handed over the company’s financial conditions and more details about how Twitter calculates daily users who can see ads. He has said that the company has provided the early with some information but, that is not substantial and minimally useful.
The tech mogul claimed that he wanted to acquire Twitter because the company no longer adheres to the principles of free speech. A self-described “free speech absolutist”, Musk had pledged to loosen Twitter’s content moderation rules once the company was under his ownership. We can witness his discontent with Twitter’s ban of some accounts, like that of former US President Donald Trump.
Musk has also called for more transparency over how the platform presents tweets to users. This improved system would allow some to be promoted and given a wider audience.
Twitter is ready to comply with Musk’s demand for data on fake accounts after acknowledging Tesla chiefs backtracking from buying the business. Twitter Inc. has claimed that it will provide Musk with access to a data stream comprising more than 500 million tweets posted daily, a Washington Post research report.
Furthermore, New York Times reported that Twitter would let Musk view its “firehose” of daily track in response to the abandonment of the deal.
BACKING OUT NOT THAT EASY?
Twitter’s chairman says that the social media platform will take legal court actions to enforce the Musk Twitter agreement. Brain Quinn, a law professor at Boston College notifies that Twitter is likely to ask the court for two things in legal action against Musk.
They’ll likely seek a ruling that Twitter has not violated its contract with Musk, and they’ll also seek a judicial order requiring Musk to complete the acquisition. The court will likely consider the information presented to them so far and whether Elon’s request for further disclosures is reasonable and necessary for government regulatory approvals.
Whatever fate is decreed, the two sides will likely keep talking, Quinn said. The heat could be solved through a renegotiated sale price. Quinn further said that Musk’s claim to need more information under the agreement is a hard argument to make. So, a judge in Delaware has acquaintance with how these transactions operate and knows the legal procedure for it.
Musk has to prove that there was something pretty egregious to make his point up to mark. It is incumbent that Elon Musk abandons the Twitter agreement because he feels like it.
Both the parties will have to make their case to a judge who will bet on whether or not the agreement was violated. Therefore, Elon has a strong point to back out of the game. If Musk fails to convince the judge that there was a “stone in a shoe”, he’ll be less likely going to succeed in the case, says Carl Tobias (a professor at Richmond School of Law).
If Musk is successful, then what about Twitter Advertisers?
As to what we see, Elon R. Musk is a wishful product planner, a free speech absolutist who plans to take the corporate independent and completely private more than he wants to develop a viable, and coherent business plan.
The New York Times states that Musk had mind-boggling ambitions glued to Twitter and was certain that he would quadruple both the revenue as well as the users in six years. It is not, however, clear where Elon Musk would steer the fate of the “social media network” if he stays intact with his Twitter deal status.