By James Simons-
Elon Musk is threatening to pull out of the $44 billion Twitter deal, alleging a ‘clear material breach’ while also accusing the company of ‘resisting and thwarting’ his right to information about fake accounts.
Twitter confirmed it had received Musk’s proposal on 14 April, before the deal was confirmed on 25 April, with the final takeover set to take place by 24 October.
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However, after Twitter accepted the offer, Musk subsequently announced that the deal has been put on hold pending an investigation into the ratio of bot accounts to actual users, having repeatedly claimed that the site has more spam and fake accounts than it had previously admitted.
Musk’s lawyers have written to Twitter accusing it of refusing to provide sufficient information about the number of false users on the service, as part of a simmering dispute over the number of spam and fake accounts that populate the platform.
In a letter to Twitter’s chief legal officer, Vijaya Gadde, lawyers representing Musk said he believed the company was “actively resisting and thwarting” his rights to access data and information from the company under the agreement. The letter said Twitter had failed to provide the information requested by Musk since 9 May, adding that a formal response from Twitter on 1 June was insufficient.
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The letter concluded with a warning that Musk reserved all his rights under the agreement, including his right to walk away from the deal and “terminate” the agreement.
Ringler also disputed Twitter’s alleged claim that it only needs to supply information for the ‘limited purpose’ of closing the deal, saying in the letter: “To the contrary, Mr. Musk is entitled to seek, and Twitter is obligated to provide, information and data for, inter alia, ‘any reasonable business purpose related to the consummation of the transaction’.
“At this point, Mr. Musk believes Twitter is transparently refusing to comply with its obligations under the merger agreement, which is causing further suspicion that the company is withholding the requested data due to concern for what Mr. Musk’s own analysis of that data will uncover.”
r Musk has said he believes that bots could account for 20% or more of Twitter users. The letter, filed with the US Securities and Exchange Commission, confirms that the two sides have gone back and forth on the issue since early May.
It says Mr Musk merits “reasonable cooperation” as he tries to line up financing for the deal.
“Twitter’s latest offer to simply provide additional details regarding the company’s own testing methodologies, whether through written materials or verbal explanations, is tantamount to refusing Mr Musk’s data requests,” the letter says.
“Twitter’s effort to characterize it otherwise is merely an attempt to obfuscate and confuse the issue.”
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