Elon Musk threatened on Monday to withdraw his offer of 44,000 million dollars to acquire Twitteraccusing the company of refuse to give you information about their fake user accounts.
Lawyers for the CEO of Tesla and SpaceX made the threat in a letter to Twitter dated Monday. The platform included the letter in a request to the United States Securities and Exchange Commission.
The letter states that Musk has asked for the information several times since May 9about a month after making his offer to buy the company, claiming it would allow him to assess how many of the company’s 229 million accounts are actually owned by fake users.
The CEO of Twitter Parag Agrawal has said that Twitter has consistently estimated that less than 5% of its accounts are fake, but Musk has refuted that, stating in a tweet published in May that 20% or more of accounts are fake.
Shares of Twitter Inc. fell more than 3% on Monday. Photo: AFP
Shares of Twitter Inc. fell more than 3% on Monday in early trading, likely outraging Twitter shareholders who sued Musk late last month for deflate the price of those papers. Twitter shares are down 23% in the last month.
In a statement Monday, Twitter said it “has and will continue to cooperatively share information with Mr. Musk to consummate the transaction, consistent with the terms of the merger agreement.”
“We intend to close the transaction and execute the merger agreement at the agreed price and terms,” he added.
The comings and goings of Elon Musk with Twitter
Elon Musk, the richest man in the world. Photo: AFP
Musk agreed in April to buy Twitter for $54.20 a share. Since then, Musk has taken several steps, including a public dispute on the social network itself with Twitter’s CEO over the fake accounts, which has caused some experts to question whether the billionaire wants to go through with the deal, or at least reduce your offer for the company.
The businessman’s lawyers said in the letter that Twitter has only offered to provide details of the company’s testing methods to determine the number of accounts, but argued that this “amounts to rejecting Mr. Musk’s data requests” and constitutes a “material breach” of the merger agreement and gives Musk the right to scrap the deal if he wants to.
“This is a clear material breach of Twitter’s obligations under the merger agreement and Mr. Musk reserves all resulting rights, including his right not to consummate the transaction and his right to terminate the merger agreement.” the letter says.
Musk wants the underlying data so he can do his own verification of what he says are the lax Twitter methodologies.
The Twitter sale agreement allows Musk to walk out of the deal if there is a “material adverse effect” caused by the company. This is defined as a change that negatively affects Twitter’s business or financial condition, Twitter has said all along. that it is going ahead with the deal, although it has not scheduled a shareholder vote on it.
Last month, Musk said that had unilaterally suspended the agreement, which the experts said it couldn’t do. If he unilaterally cancels the agreement, he could be required to pay a $1 billion breach fine.
Musk’s latest move shows how he is “looking for a way out of the deal or something that he can leverage to get a price renegotiation,” he said. Brian Quinn, Professor of Law at Boston College. Quinn added that the matter is unlikely to go to court, as he himself has already waived his ability to request further due diligence.
“I doubt he’ll be allowed out,” Quinn said. “At some point, the Twitter board will get tired of this and file a lawsuit,” asking a judge to force Musk to honor the deal.
With information from AP.