The twist in the Twitter story

Right from the day he had moved to buy Twitter, the microblogging system, Tesla’s Elon Musk played it in an unconventional way. He had announced his intention to buy Twitter in a tweet, expressed concern that Twitter was not living up to the idea of free speech, then halted the deal asking information about spam accounts, and now he says that he is calling off the deal because he did not get the information that he had sought about spam accounts.

The Twitter response was interesting as well. First, there was resistance and even hostility to Musk’s takeover bid, and then the price he offered — $46 billion — seemed too good an offer to turn down for a company that seemed strapped for funds. And now the Twitter folk say that they would go to court and demand the deal should be gone through, and accept the $1b as compensation for pulling out without closing the deal. It has not been the high corporate drama it offered to be and it seemed more like a game of bickering.

Musk sent a formal letter to the Twitter board withdrawing the offer to buy the company on Friday. Chair of Twitter board, Bret Taylor, tweeted that the board is “committed to closing the transaction on the price and terms agreed upon with Mr Musk and plans to pursue legal action to enforce the merger agreement.

We are confident we will prevail in the Delaware Court of Chancery.” Musk has 100 million Twitter followers! Musk lawyer Mike Ringler in the letter to the Twitter board said the company had failed to provide Musk the information he had sought on fake or spam accounts.

Ringler said, “Twitter has failed or refused to provide this information. Sometimes Twitter has ignored Mr Musk’s requests, sometimes it has rejected them for reasons that seem to be unjustified, and sometimes it has claimed to comply while giving Mr Musk incomplete or unusable information.”

Twitter on its part has revealed its own version on the issue of spam accounts. Twitter said that it removes one million spam accounts every day, and that spam accounts are below five per cent every quarter.

And Twitter revealed that it checks thousands of accounts chosen at random “using both public and private data such as IP addresses, phone numbers and geolocation, and how the account behaves when it is active, to determine whether an account is real.”

It has also been reported that Twitter shared raw data about the accounts with Musk, something that has not been confirmed either by Musk or Twitter.

Musk’s Twitter flirtation began in March when he rang up members of the Twitter board, including co-founder Jack Dorsey — to say that he was buying Twitter shares and he was interested in joining the board or taking it private. On April 4 in his regulatory filing, Musk revealed that he has become the largest shareholder of Twitter with a nine per cent share worth $ 3 billion.

Then he offered to buy Twitter for $46 billion, and sold his shares in Tesla worth $8.5 billion, and he also brought in commitments from others like Oracle co-founder Larry Ellison worth another $ 7 billion.

And he has now suddenly turned away from it. Whatever the legal tangles that may ensue because of his withdrawal from the deal, it does strike a bizarre note in the world of mergers and takeovers of the American corporate world.

Many sensational mergers and acquisitions turned out to be damp squibs compared to the prospects they held out.

It turns out to be a deal made in a hurry at the spur of the moment, and both sides acted clumsily in the matter.