Elon Musk accused Twitter of committing a “material breach” of his $44 billion deal to buy the company and threatened to terminate the deal, in the clearest indication yet that the man richest in the world is preparing to pull out of the takeover.
Musk’s lawyers wrote to Twitter accusing it of refusing to provide enough information about the number of fake users on the service, amid a simmering dispute over the number of spam and fake accounts that populate the platform.
In a letter to Twitter’s chief legal officer, Vijaya Gadde, attorneys representing Musk said he believed the company was “actively resisting and frustrating” his rights to access company data and information under of the agreement. The letter said Twitter had not provided the information requested by Musk since May 9, adding that a formal response from Twitter on June 1 was insufficient.
The letter ended with a disclaimer that Musk reserved all of his rights under the agreement, including his right to withdraw from the agreement and to “terminate” the agreement.
“This is a clear breach of Twitter’s obligations under the merger agreement and Mr. Musk reserves all resulting rights, including his right not to complete the transaction and his right to terminate the transaction. ‘merger agreement,’ the letter reads.
The official legal letter, released Monday by the US financial watchdog, follows a tweet-based negotiation process undertaken by Musk in recent weeks. On May 17, he tweeted that the deal “cannot go forward” until the issue of spam and fake accounts is resolved.
Fake accounts or spam accounts, called bot accounts, are automated and not managed by human users. They may use the reply function or direct messages to send advertisements or scams to users, or represent attempts to influence public discourse by tweeting political propaganda.