DETROIT –
Elon Musk is threatening to step away from his $ 44 billion bid to buy Twitter, accusing the company of refusing to give him information about his spam bot accounts.
Tesla and SpaceX CEO lawyers made the threat in a Twitter letter dated Monday. This letter was included in a Twitter presentation to the Stock Exchange Commission.
The letter says Musk has repeatedly requested information since May 9, about a month after the company’s takeover bid, in order to assess how many of the company’s 229 million accounts are fake.
Shares of Twitter Inc. they fell more than 5% in the opening bell on Monday.
In the early hours of Monday, a message was left asking for comments on Twitter.
Lawyers say in the letter that Twitter has only been offered to provide details about the company’s trial methods. But they say this is “equivalent to rejecting Mr. Musk’s data requests.” Musk wants data so he can do his own verification of what he says are lax Twitter methodologies.
Lawyers say that based on the latest Twitter correspondence, Musk believes the company is resisting and frustrating its information rights under the April merger deal.
“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 complete the transaction and his right to terminate the merger agreement, “the letter reads.
Twitter CEO Parag Agrawal has said the company has consistently estimated that less than 5% of Twitter accounts are fake. Twitter has been revealing its bot estimates to the U.S. Securities and Exchange Commission for years, while warning that its estimate could be too low.
The bot’s problem also reflects a long-standing fixation by Musk, one of Twitter’s most active celebrity users, whose name and likeness are often imitated by fake accounts that promote cryptocurrency scams. Musk seems to think that these robots are also a problem for most other Twitter users, as well as for advertisers who post ads on the platform based on how many real people are waiting to arrive.
Experts have said that Musk cannot unilaterally suspend the agreement, although this has not prevented him from acting as if he could. If he leaves, he could be hit by a $ 1 billion breakout rate.
The Twitter sale agreement allows Musk to leave the deal if there is a “material adverse effect” caused by the company. He defines it as a change that negatively affects Twitter’s business or financial conditions.
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O’Brien reported from Providence, Rhode Island