Tesla and Spacex CEO Elon Musk believes that Twitter is in material breach of the merger agreement with him, so he has the right to terminate the deal. The social media giant has refused to provide critical information relating to spam and fake accounts on its platform, Musk’s legal team explained.
Elon Musk Could Terminate His $44 Billion Twitter Buyout Offer
In a letter sent to Twitter lnc.. Monday, that was conjointly filed with the U.S. Securities and Exchange Commission (SEC), Elon Musk’s legal team wrote:
Twitter has … refused to provide the information that Mr. Musk has repeatedly requested since May 9, 2022 to facilitate his evaluation of spam and fake accounts on the company’s platform.
“Mr. Musk has created it clear that he doesn't believe the company’s lax testing methodologies ar adequate therefore he should conduct his own analysis,” Musk’s professional person value-added.
The letter notes that Twitter is needed to supply the info Musk asked for underneath the contract. Musk’s legal team any argued that the requested information is critical to create a whole and correct understanding of Twitter’s active user base, that is “the terribly core of Twitter’s business model.”
The Tesla CEO suspects that Twitter’s refusal to adjust to the merger agreement obligations may mean “the company is withholding the requested information thanks to concern for what Mr. Musk’s own analysis of that information can uncover,” the lawyer elaborate.
Furthermore, the Spacex boss believes that Twitter is “actively resisting and thwarting his data rights … underneath the merger agreement,” the letter describes, adding:
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.
According to Twitter’s proxy statement in Apr, Musk rushed to give|to provide|to present|to administer|to allow|to convey|to grant|to relinquish} his “best and final” offer of $44 billion while not ending any due diligence. “Mr. Musk failed to raise to enter into a confidentiality agreement or look for from Twitter any personal information concerning Twitter,” the social media company said in its proxy. Twitter has used this reason to refuse Musk’s request for information.
On Monday, a Twitter user explained that the social media big is liable for the omission of or misleading material facts. He clarified that waving due diligence doesn't mean you have got to just accept fraudulent speech act, like an understated variety of spam bots.
Musk concurred, tweeting: “Correct.”
Musk has been complaining about spam bots on Twitter for quite some time. He called it the “single most annoying problem” on Twitter, promising to unravel the matter if he is successful in taking over the platform. “If our Twitter bid succeeds, we'll defeat the spam bots or die trying!” he affirmed. Since his offer was accepted by Twitter, Musk has been discussing how to solve the spam larva drawback on the platform, including using the culture cryptocurrency dogecoin.
However, he proclaimed last month that his Twitter buyout deal has currently been placed on hold, tweeting: “Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do so represent but 5% of users.” Musk believes that 20% or a lot of of users are bogus.
According to the merger agreement, Musk can need to pay Twitter a $1 billion fee if he terminates his $44 billion money deal for the social media company. However, this changes if Twitter is in breach of the agreement.
Wedbush analyst Dan Ives believes that Musk is trying to terminate the deal with the social media company. Noting that Twitter will fight the accusation, he tweeted Monday:
Our view: Musk looking to walk away from deal.
( Kevin Helms, Bitcoin.com, 2022 )