It was reported this afternoon that Elon Musk’s deal to purchase Twitter is now in jeopardy over the spam accounts that Twitter won’t verify.
While Musk isn’t commenting on the troubling news, it is said that drastic action could be coming soon.
Via WAPO:
Elon Musk’s deal to buy Twitter is in serious jeopardy, three people familiar with the matter say, as Musk’s camp concluded that Twitter’s figures on spam accounts are not verifiable.
Musk’s team has stopped engaging in certain discussions around funding for the $44 billion deal, including with a party named as a likely backer, one of the people said. The people spoke on the condition of anonymity because of the sensitivity of the ongoing discussions.
Talks with investors have cooled in recent weeks as Musk’s camp has raised doubts about the recent data “fire hose” — a trove of data sold to corporate customers — they received from Twitter. Musk’s team’s doubts about the spam figures signal they believe they do not have enough information to evaluate Twitter’s prospects as a business, the people said.
Now that Musk’s team has concluded Twitter’s figures on spam accounts are not verifiable, one of the people said, it is expected to take potentially drastic action.
The person said it was likely a change in direction from Musk’s team would come soon, though they did not say exactly what they thought that change would be.
If Musk pulls out of the deal, it will potentially trigger a massive legal battle.
The terms of the deal say Musk must pay $1 billion to break up the deal, but legal experts have said that Twitter could try to force Musk to go through with the purchase if his reason for scuttling it is not based on the company’s fundamental business. When he made his offer in April, Musk waived his right to take a deeper look at Twitter’s finances. Twitter spokesperson Trenton Kennedy declined to comment. Musk did not immediately respond to a request for comment.
I don’t know if all of this news today is true, but the fact that the deal hasn’t closed in this many months suggests it probably is true. Plus the fact that Musk has been very quiet about it as of late suggests something is up.
There are a lot of people who are depending on Musk to buy Twitter and right the ship. If that doesn’t happen for some reason, Twitter could be in big financial trouble as their stock price would surely plummet.