Elon Musk Twitter takeover deal in ‘serious jeopardy’ | Twitter

Elon Musk’s proposed takeover of Twitter is reportedly “seriously at risk,” sending shares of the company down 4% in after-hours trading on Wall Street.

Musk’s team has dropped certain discussions about funding the $44 billion deal, according to a Washington Post report, citing three people familiar with the matter. According to the report, Musk has concluded that Twitter’s figures on spam accounts – a point of contention with the deal – are unverifiable.

Twitter executives Thursday defended their spam policy, citing a team of specialists and automated processes weeding out 1 million fake accounts a day, but the report found that access to the company’s public tweet feed still didn’t satisfy Musk would have. Twitter has consistently stated that less than 5% of its daily active users are spam accounts — a figure Musk openly disputes.

The report states that a “change of direction” from Musk is likely to happen soon, suggesting he will carry out his threats to try and back out of the agreed deal.

However, legal experts said the world’s richest man, who is also Tesla’s CEO, would struggle to end the acquisition without litigation. The deal to buy Twitter includes clauses that include seeking “specific performance,” meaning a court in Delaware — the US state responsible for the deal — will order Musk to accept the deal at the agreed price of $54.20 -Perform dollars per share. Shares were priced at $37.10 in after-hours trading.

“Eventually, the Twitter board of directors will get tired of the shenanigans and will file a lawsuit over certain achievements in Delaware,” said Brian Quinn, an associate professor at Boston College Law School.

Twitter can also seek a $1 billion disruption fee from Musk if he tries to break the agreement. However, signs of a legal withdrawal strategy emerged last month when Musk’s lawyers sent a letter to Twitter warning that the refusal to cooperate on the spam account issue was a “material breach” of the agreement represent. Musk’s legal team argues that failure to provide information about false accounts violates a covenant in the agreement, a promise to act in a certain way during the sales process that would allow him to walk out of the deal.

Twitter subsequently provided data for his 500 million daily tweets to reassure Musk, but the Washington Post report shows he was not happy with the results of his team’s subsequent analysis.

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Carl Tobias, the Williams Law Professor at the University of Richmond, said the deal, which is said to be “at risk,” is the latest iteration of the buyer’s regret for Musk.

“The fuss over bots appeared to be an excuse to avoid forfeiting the $1 billion termination fee. For weeks, Musk seemed to say he wasn’t comfortable with the deal, and he now appears to be trying to walk out of the deal.”

A Twitter spokesman said: “Twitter has and will continue to cooperatively share information with Mr. Musk to complete the transaction pursuant to the terms of the merger agreement. We believe this agreement is in the best interests of all shareholders. We intend to complete the transaction and enforce the merger agreement at the agreed price and terms.”