On Monday, Elon Musk made his most blatant threat yet to walk away from his purchase of Twitter, accusing the social platform of breaking the merger agreement by refusing to provide data on spam and fake accounts that he had requested.
Will the Richest Man Abandon His $44 Billion Twitter Acquisition Deal?
According to CNN, Musk alleged in a letter to Twitter's head of legal, policy, and trust, Vijaya Gadde, that Twitter is "actively resisting and thwarting his information rights" as stipulated in the agreement.
Musk's lawyer Mike Ringler said: "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."
Why Did Musk Wrote This Letter?
Musk has asked that Twitter provide information about its testing procedures to back up its claims that bots and fake accounts comprise fewer than 5% of the platform's active user base, a figure it has stated in boilerplate public reports for years. Musk claims that the true number of spam accounts is likely to be significantly higher, possibly as high as 90%.
Musk has also suggested that he conduct his own independent assessment based on Twitter data. The acquisition cannot proceed forward until the company offers evidence of its spam statistics, according to the Tesla CEO.
However, as previously reported, several analysts feel this is the billionaire's gimmick to get Twitter back to the negotiating table and cut the price.
As per CNN report, citing Twitter's Statement Monday, "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."
Is Twitter Refusing To Provide Musk Information?
Musk's lawyer wrote in the letter that: "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."
He added that this is a clear significant infringement of Twitter's merger agreement obligations, and Musk reserves all rights arising from it, including the right to dismiss the deal and terminate the merger agreement.
Musk, as a potential Twitter owner, has a clear right to the sought information in order to prepare for the transition of the social media company to his ownership and to facilitate transaction financing. To do both, lawyer Ringler wrote in the letter, that Musk needs a thorough understanding of Twitter's business model, specifically its active user base.
BCC noted that Musk would face a $1 billion break-up fee and possible lawsuit if he opts out to the said acquisition deal.
SpaceX's Shares Was Being Sold at $125 Billion Valuation Last Month
As we have reported last month, SpaceX has recently proposed to sell existing shares to its employees, and sources close to the matter said Musk may be one of the sellers.
According to a source, SpaceX will seek $70 per share this time, up 25% from its previous round, which saw a 10 to 1 stock split. This equates to a $125 billion valuation. The source also claimed that the tender offer is for existing shares rather than new stock.
To help pay the $44 billion Twitter deal, the billionaire may sell SpaceX shares.
