Elon Musk has threatened to withdraw from its deal to buy Twitter because he accused the social media giant of ‘resisting and countering’ his right to information about spam and fake accounts on the platform.
He claimed that Twitter was in a ‘clear material breach’ of its obligations and he ‘reserves all rights’ to terminate the merger agreement.
Earlier in March, Musk said he would put the deal “temporarily suspended” while he waited for the company to provide details about the share of their fake accounts.
De SpaceX CEO also tweeted last month that he ‘can not move forward’ with his $ 44 billion purchase of the platform until he has provided the requested data.
Musk has speculated that spambots could make up at least half of Twitter’s users, more than 10 times the company’s official estimate.
Elon Musk has threatened to get out of his deal to buy Twitter because he accused the social media giant of ‘resisting and resisting’ his right to information about spam and fake accounts on the platform
In a letter to Vijaya Gadde, Twitter’s Chief Legal Officer, dated Monday, Musk’s lawyer argued that the terms of the billionaire’s purchase agreement require the platform to provide the requested data, where he is thought to be multiple times. has been asking since May 9th.
He also disputes the company’s alleged assertion that it is only required to provide information for the ‘limited purpose’ of closing the deal.
“Musk has the right to search, and Twitter is obligated to provide information and data for, among other things, ‘any sensible business purpose related to the completion of the transaction,’ ‘the letter said.
‘Musk is of the opinion that Twitter is transparently refusing to comply with its obligations under the merger agreement, creating further suspicion that the company is withholding the requested data due to concerns about what Musk’s own analysis of that data will reveal.’
Twitter has been announcing its bot estimates to the U.S. Securities and Exchange Commission for years, while also warning that its rating may be too low.
Last month, Musk said it wanted to halt the purchase deal to verify that fake or spam accounts represented less than 5 percent of the company’s 229 million users in the first quarter, as Twitter reported.
If Twitter’s reporting were accurate, it would mean that there are less than 11.4 million fake accounts targeted at ads.
The billionaire said he and his team wanted to conduct their own check of 100 Twitter followers to check how many bots and spam accounts there are.
Musk’s lawyer sent a letter to Twitter’s Chief Legal Officer Vijaya Gadde on Monday.
In Monday’s letter, Musk stated that while Twitter has ‘confidence’ in its published spam estimates, he ‘does not understand’ the company’s reluctance to ‘self-evaluate those estimates’.
‘As the potential owner of Twitter, Musk is clearly entitled to the requested data to enable him to transfer Twitter’s business to his property and to facilitate his transaction financing. To do both, he must have a complete and accurate understanding of the very core of Twitter’s business model – its active user base, ‘the letter said.
“In any event, Musk is under no obligation to state his reason for requesting the data, nor to state the new terms on which the company has sought to impose its contractual right to the requested data.”
The bot issue also reflects a long fixation for Musk, one of Twitter’s most active famous users, whose name and likeness are often imitated by fake accounts that promote cryptocurrency scams.
In the letter to Vijaya Gadde (pictured), Musk said if Twitter has’ confidence ‘in its published spam estimates, he’ does not ‘understand’ the company’s reluctance to ‘independently evaluate those estimates’.
The billionaire seems to think that such bots are also a problem for most other Twitter users, such as advertisers who take ads on the platform based on how many real people they expect to reach.
However, some analysts speculate that Musk is actually looking for the spam data in an attempt to negotiate or pull out a lower price for the deal.
The Twitter sales deal lets Musk get out of the deal if there is a ‘material negative effect’ caused by the company. It defines that as a change that negatively affects Twitter’s business or financial conditions.
Financial experts say Musk is unable to hold the deal unilaterally, although that has not stopped him from acting as if he could.
If he withdraws from the merger agreement, Musk could be on the hook for a $ 1 billion breakup fee.
Although the board of Twitter approved the purchase in April, it is still not approved by shareholders, and is expected to close for at least several months.
In fact, late last month, a proposed class-action lawsuit was filed against Musk and Twitter over the purchase of the platform by Tesla’s CEO. The lawsuit alleges that Musk violated several California corporate laws and engaged in stock market manipulation.
The lawsuit alleges that Musk benefited financially by delaying disclosing his interest in the platform and ‘temporarily’ hiding his first plan to become a board member. Musk eventually refused the offered board seat.
The complaint, which was received by CNBCalso states that Musk bought Twitter shares while knowing insider information about the company based on private conversations with board members and executives.
Musk revealed his interest on Twitter on April 4 and 10 days later proposed his $ 44 billion sale. He has sold a significant chunk of his Tesla shares in an attempt to secure financing for the deal.
Since its purchase offer, both share prices of Tesla and Twitter have fallen.
Elon Musk threatens to leave a $ 44 billion Twitter deal
Source link Elon Musk threatens to leave a $ 44 billion Twitter deal