The strife between Elon Musk and Twitter (NYSE: TWTR) continues: on Monday, the Tesla CEO accused the social media giant of breaching its merger agreement by refusing to hand over details surrounding the number of spam accounts on the platform.
According to an SEC filing, Musk said Twitter is “actively resisting and thwarting his information rights” by not revealing the actual proportion of fake bots infiltrating the social media platform. In the letter written by attorney Mike Ringler, it’s a “clear material breach” of the $44 billion merger agreement, and as a result Musk “reserves all rights resulting therefrom, including his right not to consummate the transaction and his right to terminate the merger agreement.”
Last week, Musk threatened to pause his pending acquisition of Twitter until the company proves that bot accounts make up less than 5% of all user accounts; some analysts, though, attested the move to a negotiating ploy to reduce the $44 billion buyout price tag. Musk said he would conduct random sampling to determine the actual figure, but Twitter CEO Parag Agrawal explained that such analysis would require nonpublic information, which Musk wouldn’t have access to.
In the letter, Musk’s attorney reminded Twitter that it would have to hand over the requested data, disagreeing with the company’s claim that it’s required to provide information only specific to the closing of the deal. “To the contrary, Mr. Musk is entitled to seek, and Twitter is obligated to provide, information and data for, inter alia, ‘any reasonable business purpose related to the consummation of the transaction,” read the letter.
“At this point, Mr. Musk believes Twitter is transparently refusing to comply with its obligations under the merger agreement, which is causing further suspicion that the company is withholding the requested data due to concern for what Mr. Musk’s own analysis of that data will uncover,” Ringler added.
Information for this briefing was found via the SEC. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.