Elon Musk threatens to call off Twitter deal
Musk said that Twitter is breaching their agreement and is "actively resisting and thwarting his information rights."
Tesla founder Elon Musk, who recently inked a deal to buy Twitter Inc., has now threatened to walk away from it if the latter fails to provide complete information about spam and fake accounts on the platform.
In a securities filing on Monday, Musk said that Twitter is breaching their agreement and is "actively resisting and thwarting his information rights." The Tesla founder has put the deal on hold pending further information about the spam accounts.
Elon Musk had inked the deal to buy Twitter for $44 billion in April this year and had then tweeted that one of his priorities would be to remove "spam bots" from the platform.
Elon Musk threatened to throw away his $44 billion deal to buy Twitter, telling the social media network in a letter that if it does not hand over sufficient data on spam and fake accounts, then the deal's off https://t.co/eVIxweioyz pic.twitter.com/76GZ0I11Lp
— Reuters (@Reuters) June 7, 2022
Twitter Inc. in a March estimate had revealed that false or spam accounts represented fewer than 5% of its monetizable daily active users during the first quarter.
While Musk has maintained that bots could account for 20% or more Twitter users, according to the letter filed with the US Securities and Exchange Commission. The discussion between Twitter and Musk on the issue has been on since early May. Twitter, however, has defended its estimate about bot accounts.
"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," read the letter by Musk.
"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," it added.
Meanwhile, Twitter Inc. says that Musk had waived typical rights to due diligence in his hurry to get the deal done and added that it would like to complete the takeover at the agreed price and terms.
The experts believe that Musk may have been trying to renegotiate the price or even walk away from the deal through the spam account issue. He faces a $1bn break-up fee and possible lawsuit if he opts out of the deal, per a report in BBC.
