Tesla and SpaceX CEO lawyers made the threat in a Twitter letter dated Monday, and Twitter revealed this in a presentation to the U.S. Securities and 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.
If Musk leaves, he could be hooked on a colossal breakout rate. (AP)
Twitter CEO Parag Agrawal has said that Twitter has consistently estimated that less than five percent of its accounts are fake. But Musk has responded, stating in a May tweet that 20 percent or more are fake.
Shares of Twitter Inc. they fell just under three percent on Monday, likely outraging Twitter shareholders who filed a lawsuit against Musk late last month for deflating stock prices. Twitter shares have fallen 23% in the last month.
Twitter said in a statement on Monday that it “has and will continue to share information cooperatively with Mr. Musk to complete the transaction in accordance with the terms of the merger agreement.”
“We intend to close the transaction and enforce the merger agreement at the agreed price and conditions,” he added.
Musk agreed to buy Twitter for $ 54.20 a share in April.
A series of actions by Musk since then, including a public discussion with the CEO of Twitter about fake accounts, on Twitter, has led some experts to question whether the billionaire wants to continue with the agreement or at least reduce your offer.
Tesla CEO Elon Musk promised that taking over Twitter would allow him to undo the social media platform of his annoying “spam bots.” (Photo by AP / Matt Rourke, file) (AP)
Musk’s lawyers say in the letter that Twitter has only been offered to provide details about the company’s trial methods. But they claim this is “equivalent to rejecting Mr Musk’s data requests” and constitutes a “material breach” of the merger agreement which entitles him to discard the agreement if he so wishes.
“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.
Musk wants the underlying data to do its own verification of what he says are lax Twitter methodologies.
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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. Twitter has said all along that it is continuing with the deal, though it has not scheduled a shareholder vote.
Last month Musk said he had unilaterally suspended the deal, which experts said he could not do. If he leaves, he could be hit by a $ 1 billion ($ 1.3 billion) separation fee.
Musk’s latest maneuver shows how he is “looking for a way out of the deal or something that will gain influence for a price renegotiation,” said Brian Quinn, a law professor at Boston College. But Quinn said she is unlikely to stay in court as she has already given up her ability to ask for more due diligence.
“I doubt he would be allowed to leave,” Quinn said. “At some point, the Twitter board will get tired of this and file a lawsuit,” asking a judge to force Musk to comply with the deal.
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.
“If Twitter relies on its published spam estimates, Mr. Musk does not understand the company’s reluctance to allow Mr. Musk to evaluate those estimates independently,” Musk’s letter states, adding that he accepts do not disclose or retain data.
The bot problem is a long-standing fix for Musk, one of Twitter’s most famous 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.
The letter, signed by Musk’s attorney, Mike Ringler, who copied other attorneys, points to a dispute over a June 1 Twitter letter in which the company said it only had to provide information related to the closure of the sale.
Elon Musk is concerned about the number of robots that have Twitter accounts. (AP)
It says Twitter is required to provide data for any reasonable commercial purpose necessary to complete the agreement.
Twitter must also cooperate with Musk’s efforts to secure funding for the deal, including information that Musk “reasonably requests,” according to the letter.
The letter states that Musk is not obliged to explain his reason for requesting data or to submit to “new conditions that the company has tried to impose” on his right to obtain the numbers.
He alleges that Musk is entitled to data on the core of Twitter’s business model so that he can prepare for the transition to ownership.