Elon Musk threatens to cancel Twitter purchase

(CNN) – Elon Musk made his biggest direct threat yet to cancel the Twitter purchase on Monday, publicly accusing the company of violating the merger agreement by not providing the data he requested about spam and fake accounts.

In a letter to Vijaya Jade, Twitter’s chief legal, policy and trust officer, Musk said the platform “actively opposes and frustrates his information rights” as stipulated in the agreement.

“This is a clear material breach of Twitter’s obligations under the merger agreement and Mr. Musk reserves all rights arising therefrom, including his right not to execute the transaction and his right to terminate the merger agreement,” he wrote on Twitter. On Twitter, a lawyer represents Musk. .

Mask asked Twitter to hand over information about its testing methodologies to support his claims bot Fake accounts make up less than 5% of the platform’s active user base, a figure the company has consistently reported for years in frequent public disclosures. Musk also called for his own independent evaluation based on data from Twitter.

Twitter shares were down 5% in early trading on Monday. Even before the recent news, Twitter’s stock was trading well below Musk’s takeover offer of $54.20 per share. Which likely indicates investors’ skepticism about the deal.

Why is the Twitter buyout deal paused? What Elon Musk says 0:52

The company did not immediately respond to a request for comment on the letter. Twitter CEO Parag Agrawal has long endorsed his company’s spam number.

Elon Musk’s Twitter questioning

Musk asserts that the actual number of fake accounts is likely to be much higher, potentially as high as 90%. The Tesla CEO previously said the acquisition “cannot continue” until the company provides “proof” of the number it claims is spam.

Some Wall Street analysts point out that these brakes may be a case of buyer remorse and an attempt to pressure Twitter to negotiate a price lower than the $44,000 million stipulated in the agreement. From the start, questions have been raised about how Musk will finance the acquisition. Social media stocks have also taken a hit in recent weeks amid widespread market anxiety.

Monday’s message speculated that Twitter may “withhold requested data for fear of what Mr. Musk’s analysis of that data will reveal.”

The letter also alleged that Twitter attempted to restrict access to the information by interpreting the merger agreement narrowly, so that providing the data fell outside the scope of the company’s contractual requirements. But the letter noted that even under Twitter’s narrow definitions, it still has an obligation to provide the information.

In separate securities documents, Twitter previously revealed that Musk had waived a due diligence clause in the deal that may have made it easier for him to back out. Without the clause, Musk could face a more difficult scenario and potential litigation.

In brokering the Twitter acquisition deal, Musk made spam bots on the platform a central issue. And he has vowed to defeat them or “die trying,” even as he described Twitter as vital to the “future of civilization.”

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