Musk says he might cancel deal to buy Twitter
Elon Musk says he might cancel his USD 44 billion to buy Twitter saying the company is “thwarting” his requests for more information about the company’s user base.
The conflict between Twitter and Musk is the estimation of how many of Twitter’s users could be fake accounts or bots. Twitter has said no more than 5%. Musk has indicated he things it could be much higher and has demanded more information. Musk says Twitter management has so far not provided that information.
Commentators have said Musk could be trying to re-negotiate the price for the take over or that he could have an interest in walking away from the deal. Musk has earlier said that if he is right about the number of fake accounts, he could seek a lower price for Twitter.
A letter filed with US authorities says Twitter has, “in fact, 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. Twitter’s latest offer to simply provide additional details regarding the company’s own testing methodologies, whether through written materials or verbal explanations, is tantamount to refusing Mr. Musk’s data requests. Twitter’s effort to characterize it otherwise is merely an attempt 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.”
“At this point, Mr. Musk believes Twitter is transparently refusing to comply with its obligations under the merger agreement, which is causing further suspicion that the company is withholding the requested data due to concern for what Mr. Musk’s own analysis of that data will uncover.”
“Based on Twitter’s behavior 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 says.
Elon Musk has earlier tweeted that the deal “cannot move forward” unless Twitter proves its claims that less than 5% of accounts are fake or spam accounts. Referring to doubts about the number of fake accounts, Musk has announced that the deal is on hold until the management can back up its statement of less than 5% are fake accounts, bots etc.
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