Twitter Stock Tanks 7% in After Hours After Elon Musk Officially Terminates Deal

Elon Musk notified Twitter Friday afternoon that he will be terminating the $44 billion dollar deal to buy Twitter.

JUST IN – Elon Musk terminates $44 billion Twitter deal.

— Disclose.tv (@disclosetv) July 8, 2022

On this news Twitter stock sunk down almost 7% in after-hours trading.

A lawyer for Musk sent a letter charging that “Twitter has not complied with its contractual obligations.”

The letter claims that Twitter did not provide Musk with the relevant business information that he requested as the contract required. Musk has previously said he wanted to be able to verify Twitter’s claim that their spam accounts are less than 5% of monetizable daily active users.

The letter reads, “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 appear to be unjustified, and sometimes it has claimed to comply while giving Mr. Musk incomplete or unusable information. “

The letter also accuses Twitter of breaching the merger agreement because it allegedly contains, “materially inaccurate representations.” Twitter has claimed that it is not possible to calculate spam accounts from solely public information that a team of experts conducts a review to reach the 5% figure.

It appears that Musk may have to pay $1 billion if he backs out. Twitter could still seek to hold Musk to the original agreement or get more money by suing him for walking away from the deal, unless he can prove his claims in court.