Elon Musk believes Twitter has committed a material breach of the repurchase agreement and therefore has the right to terminate it. Musk’s legal team explained that the social media giant refused to provide basic information regarding spam and fake accounts on its platform.
In a letter sent to Twitter on Monday, which was also filed with the US Securities and Exchange Commission (SEC), Elon Musk’s legal team wrote:
Twitter has refused to provide information that Mr. Musk has repeatedly requested since May 9, 2022 to assist in its assessment of spam and fake accounts on the company’s platform.
“Mr. Musk has made it clear that he does not believe the company’s lax testing methodologies are sufficient, so he must conduct his own analysis,” Mr. Musk’s attorney added.
The letter indicates that Twitter is required to provide the data that Mr. Musk requested under the acquisition agreement. Musk’s legal team also argued that the required data was necessary to get a complete and accurate picture of Twitter’s active user base, which is “the core of Twitter’s business model.”
The Tesla CEO suspects that Twitter’s refusal to comply with its merger agreement obligations could mean that “The company is withholding the requested data for fear of what Mr. Musk’s analysis of that data will revealLawyer details.
In addition, the head of Spacex believes that Twitter “Resist and thwart his rights to information … under the Acquisition Agreement‘, describing the message, which adds:
This is a material breach of Twitter’s obligations under the acquisition agreement and Mr. Musk reserves all rights under it, including his right not to complete the transaction and his right to terminate the repurchase agreement.
According to a Twitter agent’s April statement, Mr. Musk was quick to make his “best and last” bid of $44 billion without doing any due diligence. “The social media company said in its proxy that Mr. Musk did not ask to enter into a confidentiality agreement and did not seek to obtain non-public information related to Twitter from Twitter. Twitter used this reason to deny Musk’s data request.
On Monday, a Twitter user clarified that the social media giant may be held liable for deleting misleading material or facts. He explained that the above due diligence does not mean accepting a fraudulent disclosure, like a few spam bots.
Musk nodded his head, and tweeted:Right. “
Musk has been complaining about spambots on Twitter for some time. called it “Most annoying problemon Twitter, promising to fix the problem if he succeeds in taking over the platform. “If our Twitter demo succeeds, we’ll defeat the hackers or die trying!Confirmed. Since his offer was accepted by Twitter, Musk has been discussing how to solve the spambot issue on the platform, including the use of the dogecoin cryptocurrency meme.
However, he announced last month that his deal to buy Twitter is now on hold, tweeting: “Twitter deal temporarily on hold details that fake/fake accounts actually represent less than 5% of users.” Musk estimates that 20% or more of users are fake.
According to the takeover agreement, Musk will have to pay Twitter $1 billion if it terminates the $44 billion cash deal it had with the social media company. However, this changes if Twitter does not adhere to the agreement.
Dan Ives, an analyst at Wedbush, believes Musk is looking to finalize the deal with the social media company. Noting that Twitter would fight the accusation, he tweeted on Monday:
Our view: Musk is looking to pull out of the deal.