Musk signed the deal without asking for more information
Twitter has released information regarding negotiations for its acquisition by Elon Musk, indicating that he chose not to ask questions about the business of the social media company it has now cited in announcing that the $44 billion acquisition is pending.
The information depicts Musk rushing to strike a deal with his best offer. It appears that Musk negotiated the Twitter deal over the weekend of April 23 and April 24 without performing any due process.
Since signing the deal on April 25, Musk has questioned the accuracy of Twitter's public filings about bot accounts that represent less than 5% of its user base, claiming their number may be at least 20%.
Independent researchers have predicted that between 9% to 15% of the millions of accounts on the platform are bots. "CEO Parag Agrawal has refused to provide evidence of his company's appreciation and the transaction cannot be completed until he does," Musk said on Twitter.
The new data shows that Musk made no effort to obtain information about the problem in the lead up to the deal.
"Musk has not requested to enter into a confidentiality agreement or request from Twitter any non-public information related to Twitter," Twitter said.
The information does not refer to the threats made by Musk about not completing the deal without knowing the number of bot accounts.
Twitter investors seemed convinced that a deal at the agreed-upon price was now out of the question. Shares of the company were trading around $37.55, 30% lower than the transaction price of $54.20 per share.
Musk suggested at a conference in Miami that the deal could be done at a lower price, without specifying what it might be. He has not yet told the company that he wants to renegotiate the deal.
Legal experts said Musk would likely lose out in court if he tried to walk away from the deal. But they said any lawsuit would likely drag on and create uncertainty about Twitter's business.
Musk is contractually obligated to pay a $1 billion withdrawal fee if he does not complete the deal. But Twitter can sue him to force him to complete a deal and get a settlement from him as a result.
Because Musk did not ask Twitter for information before signing the deal, he must now show that the company's public filings were a mistake and cause long-term financial problems.
Twitter said it remained committed to the deal at the agreed price and expected to complete it in 2022. The San Francisco-based company said Musk had expressed his desire to join its board of directors or make it private on March 26.
This indicates that Musk mischaracterized his Twitter stake as negative when he disclosed it on April 4. He later clarified that it was an active stake.
Information shows that the company's CEO is entitled to $60.2 million if the deal is closed. While the company's chief financial officer gets $46.4 million. Her chief lawyer gets $30 million.
Goldman Sachs is charging $65 million to advise Twitter once the deal is complete, having received $15 million.
JPMorgan Chase is getting paid $48 million once the deal closes, having received $5 million for its advice.
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