Elon Musk threatens to walk away from Twitter acquisition citing lack of data on fake accounts
Elon Musk has threatened to walk away from the proposed $44 billion deal to acquire Twitter as he accused the company of thwarting or resisting his attempts to get information on the quantum of spam and fake accounts on the microblogging site.
In filings with the US Securities Exchange Commission, Twitter said it is in receipt of the letter from the law firm representing Elon Musk which raised numerous concerns on the billionaire's behalf.
“Based on Twitter’s behaviour to date, and the company’s latest correspondence, in particular, Mr Musk believes the company is actively resisting and thwarting his information rights (and the company’s corresponding obligations) under the merger agreement. This is a clear material breach of Twitter’s obligations under the merger agreement and Mr Musk reserves all rights resulting therefrom, including his right not to consummate the transaction and his right to terminate the merger agreement,” the letter noted.
The letter also noted that Twitter had refused to provide the information that Elon Musk had repeatedly requested since May 9 to facilitate his evaluation of spam and fake accounts on the company’s platform. It also accused Twitter of attempting 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,” the letter noted.
The law firm also noted that Twitter was transparently refusing to comply with its obligations under the merger agreement, which raises suspicion that the company was withholding the requested data.
“If Twitter is confident in its publicised spam estimates, M. Musk does not understand the company’s reluctance to allow Mr Musk to independently evaluate those estimates,” the letter noted.
This latest development has thrown the Tesla and SpaceX founder's plans to acquire Twitter up in the air after an initial promise to completely overhaul the micro-blogging site and make it more democratic in terms of having differing opinions. The Tesla CEO even spoke about the investors who would be joining him in the bid, but now more questions arise on whether the deal would be consummated.