Why Elon Musk Threatens to Give Up Buying Twitter | Technology

In a letter sent to regulators, Musk said he had the right to do his own measurement of spam and fake accounts.

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The letter formalizes a dispute that has raged for weeks after Musk declared the deal “on hold” pending more information.

Twitter defended its position.

But Musk said he believes spam and fake accounts represent a much larger share. than the less than 5% of daily users that Twitter publicly reports having.

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“As a prospective owner of Twitter, Musk is clearly entitled to the requested data to enable him to prepare for the transition of the Twitter business to his ownership and to facilitate its transaction financing. To do both, he must have a thorough understanding and needs the core of Twitter’s business model – its active user base,” attorney Mike Ringler wrote in the letter.

“Based on Twitter’s behavior to date and the company’s most recent correspondence in particular, Musk believes the company is actively resisting and thwarting his rights to information,” the letter read.

“This is a clear material breach of Twitter’s obligations under the merger agreement and Musk reserves all resulting rights, including his right not to consummate the transaction and his right to terminate the merger agreement.”

The dispute raised further doubts about the future of the acquisition, which Twitter’s board approved in April.

O twitter said Musk waived typical due diligence rights in their eagerness to close the deal.

But in May, Musk raised the issue of spam accounts on social media, saying the deal was on hold but he remained committed to the purchase.

Musk is subject to a fine of $1 billion (about $4.8 billion) if he backs out of the deal, as is Twitter.

Analysts said that Tesla boss may be using the issue to try to renegotiate the price or even walk away. They said Musk’s decision to raise the issue on social media was unconventional, making it difficult to read how serious the proposal was.

When Twitter Chief Executive Parag Agrawal defended the company in a series of tweets, Musk responded with a poop emoji.

Elon Musk and Parag Agrawal — Photo: Reuters and Disclosure/Twitter

Musk said he believes bots may represent 20% or more of Twitter users. The letter, filed with the US Securities and Exchange Commission, confirms that the two sides have debated the matter since early May.

She says Musk deserves “reasonable cooperation” as he tries to get funding for the deal.

“Twitter’s latest offer to simply provide additional details about the company’s own testing methodologies, whether through written materials or verbal explanations, amounts to denying Musk’s requests for data,” the letter reads.

“Twitter’s effort to characterize it otherwise is just an attempt to obfuscate and confuse the issue.”

Musk’s plans for the company have drawn intense scrutiny from regulators around the world, while also generating some alarm among investors in electric car company Tesla and rocket company SpaceX, which Musk also owns.

He’s rallied outside investors to help pay for the purchase and is also using paper and loans backed by his Tesla shares, which have been hit in recent weeks as market turmoil snatched billions from the values ​​of companies like Tesla.

The decline also made Musk’s offer of $54.20 a share on Twitter look even more generous. On Monday, Twitter shares were trading below $39, down 3%. They have yet to return to the highs they hit last month shortly after Musk revealed he had bought about 9% of the company’s shares.

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