Tesla and SpaceX CEO Elon Musk believes Twitter is in material breach of the merger agreement with them, so he has the right to terminate the deal. Musk’s legal team reported that the social media giant declined to provide vital information related to spam and fake accounts on its platform.
Elon Musk may end his $44 billion Twitter buyout offer
In a letter sent to Twitter Inc. on Monday, which was also filed with the US Securities and Exchange Commission (SEC), Elon Musk’s legal team wrote:
Twitter… has declined to provide information that Mr. Musk has repeatedly requested to facilitate the evaluation of spam and fake accounts on the company’s platform since May 9, 2022.
“Mr. Musk has made it clear that he does not believe the company’s loose testing methods are sufficient so he should conduct his own analysis,” Musk’s attorney said.
The letter states that Twitter is required to provide data requested by Musk under the merger agreement. Musk’s legal team further argued that the requested data is necessary to create a complete and accurate understanding of Twitter’s active user base, which is “the core of Twitter’s business model.”
The Tesla CEO suspects that Twitter’s refusal to comply with the obligations of the merger agreement could mean “the company is withholding the requested data, due to concerns that Mr. Musk’s own analysis of that data would expose.” Will do,” the lawyer elaborated.
In addition, the SpaceX boss believes that Twitter is “actively opposing and failing to protect its information rights under the merger agreement,” the letter states:
This is a clear material breach of Twitter’s obligations under the merger agreement and Mr. Musk reserves all rights as a result, including his right not to terminate the transaction and his right to terminate the merger agreement.
According to Twitter’s proxy statement in April, Musk rushed to make his “best and final” $44 billion offer without due diligence. “Mr. Musk did not enter into a confidentiality agreement or ask Twitter for any non-public information about Twitter,” the social media company said in its proxy. Twitter used this reason to request Musk’s data. To reject.
On Monday, a Twitter user explained that the social media giant could be liable for omitting or misleading material facts. He clarified that waving due diligence doesn’t mean you have to accept fraudulent disclosure, such as a low number of spam bots.
Musk agreed, tweeting: “Right.”
Musk has been complaining about spambots on Twitter for quite some time now. He called it “the single most annoying problem” on Twitter, promising to solve the problem if he managed to take over the platform. “If our Twitter bid is successful, we’ll beat spam bots or die trying!” He confirmed. Since his proposal was accepted by Twitter, Musk has been discussing how to solve the spambot problem on the platform, which involves using the meme cryptocurrency Dogecoin.
However, he announced last month that his Twitter buyout deal has now been put on hold, tweeting: “The Twitter deal temporarily pending details supports the calculation that spam/fake accounts actually account for less than 5% of users.” represent.” Musk believes that 20% or more of users are fake.
According to the merger agreement, Musk will have to pay Twitter $1 billion if it ends his $44 billion cash deal for the social media company. However, this changes if Twitter breaches the agreement.
Wedbush analyst Dan Ives believes Musk wants to end the deal with the social media company. Noting that Twitter will fight the allegations, he tweeted on Monday:
Our view: Musk wants to walk away from the deal.
Do you think Twitter is hiding something? And, do you think Elon Musk should walk away from the deal? Let us know in the comments section below.
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