MUSK THREATENS TO WALK AWAY FROM TWITTER DEAL

June 7, 2022
3 years ago

Elon Musk has threatened to pull out of his $44 billion acquisition of Twitter, claiming that the social media business has "thwarted" his attempts to learn more about its user base.

 

Mr Musk said in a letter to authorities that he had the right to measure spam accounts on his own.

 

 

 

The letter puts an end to a spat that has been simmering for weeks since Mr Musk placed the acquisition "on hold" for more details.

 

 

 

Twitter has come out in defense of its figures.

 

 

 

Mr Musk, on the other hand, has stated that he believes spam and fraudulent accounts account for significantly more than the less than 5% of daily users reported by Twitter.

"As the potential owner of Twitter, Mr Musk has a clear right to the sought information in order to prepare for the transition of Twitter's operations to his ownership and to assist transaction finance." To achieve both, he needs a thorough knowledge of the very heart of Twitter's economic model — its active user base," said lawyer Mike Ringler in the letter.

 

"Based on Twitter's behavior to date, and in particular the business's most recent letters," the letter stated, "Mr Musk feels the firm is deliberately contesting and undermining his information rights."

 

 

 

 

 

"This is a clear significant infringement of Twitter's merger agreement requirements, and Mr Musk reserves all rights arising from it, including the right not to complete the deal and the right to cancel the agreement."

The disagreement has cast fresh uncertainty on the takeover, which was approved by Twitter's board of directors in April.

 

 

 

 

 

"In order to complete the acquisition in accordance with the terms of the merger agreement, Twitter has and will continue to cooperatively exchange information with Musk," the firm stated in a statement.

 

 

 

Mr Musk forfeited usual due diligence rights in his haste to close the acquisition, according to Twitter, which added that it intended to execute the takeover at the agreed price and terms.

 

 

 

Mr Musk initially addressed the problem of the spam accounts on social media last month, saying the deal was on hold but he remained committed to the purchase. If he opts out, he faces a $1 billion break-up fee and probable litigation.

According to analysts, Tesla's CEO may be utilizing the situation to try to renegotiate the price or even walk away. They claimed Mr Musk's decision to bring the problem up on social media was unusual, making it impossible to gauge his seriousness.

 

Mr Musk reacted with a poo emoji when Twitter CEO Parag Agrawal defended the company's methodology in a series of tweets.

 

 

 

Mr. Musk has stated that he believes bots account for 20% or more of Twitter users. The letter, which was filed with the Securities and Exchange Commission in the United States, indicates that the two parties had been back and forth on the matter since early May.

 

 

 

It claims that Mr Musk deserves "fair cooperation" as he attempts to get funding for the project.

"Twitter's current promise to simply give further details regarding the company's own testing processes, whether through written documents or verbal explanations," the letter states, "is comparable to denying Mr Musk's data demands."

 

"Twitter's attempt to characterize it in a different way is nothing more than an attempt to obscure and complicate the subject."

 

 

 

On Monday, Texas Attorney General Ken Paxton weighed in on the controversy, stating that he had opened an inquiry against Twitter for "possibly fraudulent reporting over its bogus bot accounts." Twitter has until June 27 to reply to his information request.

 

 

 

Mr Musk's intentions for the company have sparked significant scrutiny from authorities across the world, as well as some concern among investors in Tesla and SpaceX, both of which Mr Musk oversees.