Elon Musk’s deal to buy Twitter is in serious trouble, according to sources close to the matter.
The issue comes down to Musk’s team concluding that Twitter’s figures on spam accounts could not be verified. Twitter provided a “firehose” of data to Musk and his team last month in response to questions around the number of spam or fake accounts on the social media platform.
According to reporting by the Washington Post, Musk’s team has stopped engaging in certain discussions around the deal.
Talks with investors have also reportedly cooled, and Musk’s team signaled that they do not have enough information to evaluate Twitter’s perspective.
However, it is not clear what is going to happen next.
People close to the deal believe that a change in direction will likely come in the short term. However, it is not clear what that change of direction would include. If Musk does look to back out of the deal, we could see a massive legal battle break out.
In the original deal, Musk waived his right to take a deeper look at Twitter’s finances. In addition, he agreed to a $1 billion penalty for breaking the agreement. Twitter also agreed to the same terms.
To break the deal, Musk would need to find an issue with with Twitter‘s fundamental business.
Thus, it may be an uphill battle to prove that spam bots are part of the companies fundamental business for Musk, with the eventual answer probably coming via a court ruling.
No one is exactly sure what will happen, but we are curious about how this will go over the next few days and weeks.