In a letter to Twitter’s legal, political and trusted head, Vijaya Gadde, Musk alleged that Twitter “is actively resisting and frustrating its information rights,” according to the agreement.
“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 consummate the transaction and his right to terminate the merger agreement, “a lawyer representing Musk wrote to the company. .
Musk has demanded that Twitter provide information on its test methodologies to support its claims that bots and fake accounts make up less than 5% of the platform’s active user base, a figure the company said constantly for years in general public revelations. Musk has also asked to do his own independent assessment based on Twitter data.
Shares of Twitter fell 5% early in business on Monday. Even before the latest development, Twitter shares were trading well below Musk’s takeover bid of $ 54.20 per share, which probably indicated investors ’skepticism about the deal.
The company did not immediately respond to a request for comment on the letter. Twitter CEO Parag Agrawal has been on the side of his company’s spam metrics for a long time.
Musk has claimed that the actual number of spam accounts is probably much higher, potentially up to 90%. Musk has previously said the acquisition “cannot move forward” until the company provides “proof” of its spam metrics.
Some Wall Street analysts have said the setback could be a case of buyer remorse and an effort to pressure Twitter to negotiate a lower price for the $ 44 billion deal. There have been questions from the beginning about how Musk would finance the acquisition. Social media stocks have also had an impact in recent weeks amid widespread market concern.
Monday’s letter speculated that Twitter could “withhold the requested data out of concern over what it will discover Mr. Musk’s own analysis of the data.”
The letter also stated that Twitter had tried to restrict access to the information by interpreting the merger agreement strictly, so that providing the information would fall outside the scope of Twitter’s contractual requirements. But the letter accused that, even by the narrow definitions of Twitter, it still has an obligation to provide the information.
In an independent securities presentation, Twitter previously revealed that Musk had waived a due diligence clause in the deal that could have facilitated the withdrawal of the deal; without him, Musk could face tougher escalation and the prospect of litigation. In making the deal to buy Twitter, Musk has made spam bots on the platform a central issue. He has promised to defeat them by “dying in the attempt,” though he has described Twitter as vital to the “future of civilization.”