Why does Elon Musk want out of his deal with Twitter?

Elon Musk expressed his concerns over the amount of bot accounts on Twitter once again on Friday and signaled that he is backing out of his deal to buy the social media company for $44 billion.

The Tesla CEO rescinded his offer, notifying the company Friday in a letter from his lawyers about the decision, according to a regulatory filing, Variety reported. Musk claims Twitter misrepresented the extent of spam and fake accounts on the social network, and says his team’s preliminary estimates put it as “tremendously higher” than the figure Twitter has declared. However, he has not provided any evidence to back up his claims.

Twitter had indicated that it believed that no more than 5% of accounts on the site are fake or automated. The company has also indicated that, from the time Musk began expressing fears about the presence of bots, it has complied with its obligations under the terms of the purchase agreement. Musk’s lawyers dispute this saying in a letter that Twitter “appears to have made false and misleading representations upon which Mr. Musk relied,” when the two parties agreed on the original offer.

Without the information about bots, the deal ends

Back in June, Musk’s lawyers filed a letter stating that part of the SpaceX founder’s funding was contingent on him receiving the information about bots to evaluate the deal. Musk “is clearly entitled to the requested data to enable him to prepare for transitioning Twitter’s business to his ownership and to facilitate his transaction financing,” the lawyers wrote according to NBC News.

However, some experts note that given Twitter’s apparent compliance with Musk’s information requests, the bot dispute may just be a pretext for Musk to walk away from the deal altogether. “If he were really concerned about the bot info, he’d sue,” said Ann Lipton, a law professor at Tulane University. “It seems more likely that it’s not really about that,” she added, according to NBC News. “Instead, he wants to claim Twitter is in breach of contract, so he doesn’t have to close.”

Musk to pay $1 billion to Twitter

With Musk rescinding the Twitter acquisition, the Tesla and SpaceX CEO will have to pay a $1 billion breakup fee to Twitter, unless he can prove that he wasn’t provided with the necessary information on the company and the social media company significantly misled him. Furthermore he could be subject to lawsuits by Twitter shareholders or Twitter itself.

Twitter chairman Bret Taylor let it be known that the company is teeing up for a legal fight to make Musk follow through on his commitment. “The Twitter 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,” he posted in a tweet. “We are confident we will prevail in the Delaware Court of Chancery.”