Elon Musk is withdrawing his deal to buy Twitter

Elon Musk is ending his $44 billion deal to buy Twitter, according to a filing by the billionaire filed with the Securities and Exchange Commission on Friday.

Musk’s attorneys sent a letter to Twitter saying he would “terminate their merger agreement,” the filing says. In the letter, Musk argues he has the right to go out of business because Twitter didn’t give him enough information about the company’s business.

Musk’s attorneys accused Twitter of “denying or omitting” information that would help Musk and his team determine the true number of bots or spam accounts on the social media platform.

“Sometimes Twitter has ignored Mr. Musk’s requests, sometimes it has refused them for seemingly unjustified reasons, and sometimes it has claimed to do so while providing Mr. Musk with incomplete or unusable information,” the letter said.

Elon Musk’s deal to buy Twitter is in jeopardy

Twitter CEO Bret Taylor tweeted Friday that the company would take legal action against Musk.

“Twitter’s board of directors is committed to completing the transaction at the price and terms agreed with Mr. Musk and plans to take legal action to enforce the merger agreement,” he wrote. “We are confident that we will prevail in the Delaware Court of Chancery.”

Legal experts have said Musk cannot walk away from the deal. Its April agreement to buy the company included a commitment to go ahead with the acquisition unless there’s a major change in the deal, and legal experts say nothing happened to reach that threshold. Musk has previously threatened to nix the deal if Twitter doesn’t do it Give it more data to do its own analysis of how many spam bots it has, while Twitter has stated that it cannot reveal any personal information about its users like their names, email and IP addresses that it used to create its own bot numbers.

Musk did not immediately respond to requests for comment.

Read the letter Musk’s lawyers filed to end the $44 billion Twitter deal

In the letter, Musk accused Twitter of a material breach of terms of the agreement, making “false and misleading” representations and also citing the likelihood of a “material adverse impact,” a significant change that would hurt the company’s value.

“In short, Twitter has not provided any information requested by Mr. Musk for nearly two months, despite his repeated, detailed clarifications aimed at simplifying Twitter’s identification, collection, and disclosure of the most relevant information contained in Mr. Musk’s original.” Inquiries were requested,” the letter said.

In the letter, Musk also cited the company’s finances as a possible reason to exit the deal, citing the company’s “declining business prospects and financial prospects” as a separate reason for ending the deal.

Musk argued in the letter to the company that Twitter broke its agreement not to change its business significantly after the deal was signed, firing two senior executives in May and making layoffs on its hiring team in July. Musk said he did not waive the right to conduct due diligence when signing the deal and expected Twitter to provide more information.

Legal experts have said that when he signed the deal, he agreed to buy the company as is.

Musk rocked the social media world in April by agreeing to buy Twitter for $44 billion. He assembled a large group of co-investors and used his personal wealth to obtain the debt needed to close the deal. But shortly after his acquisition announcement, a global sell-off in tech stocks eroded Musk’s own fortune, while his $54-per-share purchase price looked like a serious overvaluation of Twitter.

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Musk skeptics said he only made up the argument about bots to find a reason to get out of what he now saw as bad business. Musk himself was aware of Twitter’s spam problem and cited it as one of the reasons he wanted to buy the company in the first place.

Wall Street has been skeptical that Musk will complete the deal for months. Twitter’s stock price is around $37 today, down almost 30 percent from the $52 it was trading on the day it announced its acquisition.

The filing comes after the Washington Post reported Thursday that the deal was in serious jeopardy because one of the co-investors hadn’t heard from Musk’s team for weeks, according to people familiar with the situation who spoke on condition of anonymity to discuss sensitive matters.

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