Finance

Elon Musk threatens to walk away from Twitter deal over alleged “breach” of agreement


Billionaire, Elon Musk has stated that he believes Twitter Inc. is breaching their acquisition deal by not providing information about spam and fake accounts as he has demanded.

In an amended securities and exchange filing made today, Musk stated that he believes Twitter is “actively resisting and thwarting his information rights” by refusing to disclose the information.

Last month,  Musk said he wouldn’t proceed with his $44 billion takeover of Twitter unless the social media giant can prove bots make up fewer than 5% of its users.

Twitter Chief Executive Officer, Parag Agrawal has said the number of fake accounts is less than 5% when measuring daily users. The company has also previously cited the figure in its quarterly filings.

However, Mr Musk said he doesn’t agree with Twitter’s assessment. He made it clear in the amended security filings.

  • Twitter’s latest offer to simply provide additional details regarding the company’s own testing methodologies, whether through written materials or verbal explanations, is almost the same as refusing Mr. Musk’s data requests.
  • According to the filing. “Twitter’s effort to characterize it otherwise is merely an attempt to obfuscate and confuse the issue. Mr. Musk has made it clear that he does not believe the company’s lax testing methodologies are adequate so he must conduct his own analysis. The data he has requested is necessary to do so.”
  • This is however not the first time the billionaire has formally threatened to walk away from the deal by amending the filing at the security and exchange commission as he usually tweets about it leaving doubts as to whether he is serious or not as it can be hard to decipher when the billionaire is joking, sending a meme or just trolling.
  • However, it would be safe to assume that he is serious this time, judging from his actions. It is unknown what the other shareholders of Twitter think of the filing and how they would react to it. Mr Musk is still the largest individual shareholder and has a lot of stake in the company but right now the merger is not looking like a deal that would be closed soon.

In addition to amending the filings, the billionaire warned in a letter to the company on Monday that Twitter was in a “clear material breach” of its obligations and that Musk reserves all rights to terminate the merger agreement.

The CEO of Twitter may either have to prove that bots constitute less than 5% of Twitter users by providing the data requested by Mr Musk or call the bluff of the billionaire and have the merger agreement terminated.



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