Elon Musk is threatening to pull out of his $44 billion bid to acquire Twitter, accusing the company of refusing to give him information about his automated spam accounts.
Attorneys for the CEO of Tesla and SpaceX made the threat in a letter to Twitter dated Monday. This letter was included in a Twitter filing with the US financial market watchdog, the Securities and Exchange Commission (SEC).
According to the letter, Mr. Musk has repeatedly requested this information since May 9, about a month after his offer to buy the company, so that he could assess how many of the company’s 229 million accounts should be removed. considered false.
Shares of Twitter fell more than 5% on Monday at the open.
A message was left early Monday seeking comment from Twitter.
In the letter, the attorneys say Twitter only offered to provide details about the company’s testing methods. But they argue that this “equates to denying Mr. Musk’s requests for data.” The billionaire wants data so he can do his own audit of what he says are Twitter’s lax methodologies.
The attorneys say that based on Twitter’s latest correspondence, Mr. Musk believes the company is resisting and frustrating his rights to information under the April merger agreement.
“This is a clear breach of Twitter’s obligations under the merger agreement and Mr. Musk reserves all resulting rights, including his right not to complete the transaction and his right to terminate the transaction. ‘merger agreement,’ argues the missive.
Twitter CEO Parag Agrawal said the company has always estimated that less than 5% of Twitter accounts are fake. Twitter has been disclosing its robo-account estimates to the SEC for years, while warning that its estimate may be too low.
The problem of rogue spam accounts also reflects a long-standing fixation with Mr. Musk, one of Twitter’s most active celebrities, whose name and likeness are often impersonated by fake accounts promoting scams. cryptocurrency. Musk seems to think these bots are also a problem for most other Twitter users, as well as advertisers, who serve ads on the platform based on how many real people they expect to reach.
Experts have stressed that Mr Musk could not unilaterally suspend the deal, although that did not stop him from acting as if he could. If he backed out of the deal, he could be liable for a severance package of US$1 billion.
The Twitter sale agreement allows Mr Musk to opt out of the deal if there is a “material adverse effect” caused by the company. He defines this as a change that negatively affects Twitter’s business or financial terms.