Dynamite News Twitter Deal: Elon Musk threatens to 'abandon' deal over merger breach
Openly accusing Twitter of breaching the merger agreement, Elon Musk has threatened to walk away and call off the USD 44 billion acquisition of the social media company for not providing the data he has requested on spam and fake accounts. Read further on Dynamite News:
California (US): Openly accusing Twitter of breaching the merger agreement, Elon Musk has threatened to walk away and call off the USD 44 billion acquisition of the social media company for not providing the data he has requested on spam and fake accounts.
Musk alleged that Twitter is "actively resisting and thwarting his information rights" as outlined by the deal, CNN reported, citing the letter he sent to Twitter's head of legal, policy and trust, Vijaya Gadde.
Musk demanded that Twitter turn over information about its testing methodologies to support its claims that bots and fake accounts constitute less than 5% of the platform's active user base, a figure the company has consistently stated for years in boilerplate public disclosures, however, Monday's letter claimed Twitter had sought to restrict access to the information by interpreting the merger agreement narrowly, such that providing the information would fall outside the scope of Twitter's contractual requirements.
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While Musk has called for doing his own independent assessment based on Twitter data, some Wall Street analysts have said this pushback may be a case of buyer's remorse and an effort to pressure Twitter into negotiating a lower price for the USD 44 billion deal, CNN said.
In a separate securities filing, Twitter previously disclosed that Musk had waived a due diligence clause in the deal that could have made it easier or him to back out of the agreement; without it, Musk could face a tougher climb, and the prospect of litigation.
"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," an attorney representing Musk wrote to the company amid the ongoing issue. Shares of Twitter fell 5 per cent in early trading Monday.
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Meanwhile, Twitter's CEO, Parag Agrawal has stood by his company's longtime spam metric."Twitter has and will continue to cooperatively share information with Mr. Musk to consummate the transaction in accordance with the terms of the merger agreement," the company said in a statement on Monday.
Musk has alleged that the true number of spam accounts is likely much more, potentially as high as 90%. Musk has previously said the acquisition "cannot move forward" until the company provides "proof" of its spam metric.In making the agreement to buy Twitter, Musk has made spam bots on the platform a central issue. He has vowed to defeat them of "die trying," even as he has described Twitter as being vital to "the future of civilization.
"Since Musk'sannouncement of his USD 44 billion purchase of Twitter, there have been many reactions worldwide.According to some, he will open doors for freedom of speech while others fear the consequences that might come from Musk, potentially removing all content moderation. (ANI)