Tesla CEO Elon Musk said he had canceled a $44 billion deal to buy Twitter, and added that Twitter had failed to provide information about fake accounts on its platform.
Twitter shares fell 6 percent in post-close trading.
Musk’s lawyers said in a notification to regulators that Twitter failed or refused to respond to multiple requests for information about fake or unwanted accounts on the platform, which is essential to the company’s business.
Musk has threatened to block the deal unless the company provides evidence that the fake accounts are less than 5 percent of the percentage of users who see ads on the social media service.
Brett Taylor, Twitter’s chairman, said the board intends to pursue legal action to enforce the merger agreement. “The Twitter board is committed to closing the transaction at the price and terms agreed with Mr. Musk,” he said.
Musk’s cancellation of the $44 billion deal, which he signed last April, opens the door to a legal battle with Twitter, over the fees for dissolving the deal, which may reach one billion dollars and more.
“Mr. Musk is exercising his right to cancel the agreement and abandon the deal,” his lawyers said, in a letter to Twitter, a copy of which was sent to the US Securities and Exchange Commission.