7 June 2022 08:26
Billionaire Elon Musk has accused Twitter of breaching the terms of his $44 billion acquisition of the micro-blogging service.
“In fact, Twitter has refused to provide information that Mr. Musk has frequently requested since May 9, 2022, to facilitate the assessment of random and fake accounts on his company’s platform,” he said in an open letter issued by his attorneys on Monday.
The letter stated that Twitter was required under the terms of the acquisition deal to provide data and information that Musk requested in connection with the deal.
“Based on Twitter’s conduct to date, and the company’s most recent communications in particular, Mr. Musk believes that the company is actively resisting and thwarting his information rights (and the company’s corresponding obligations) under the merger agreement,” the letter added.
“This is a material breach of Twitter’s obligations under the merger agreement and Mr. Musk reserves all rights arising therefrom, including his right not to complete the transaction and his right to terminate the merger.”
Twitter itself estimates that fake accounts represent less than 5% of its user base, with CEO Paraj Agrawal confirming that the service blocks more than half a million unwanted accounts every day, most of them before users see them.
Agrawal cautioned that estimates of the number of fake accounts by outsiders could not be taken seriously.
Musk has been trying since mid-May to confirm an issue related to Twitter’s alleged erroneous estimates of the number of spam and fake accounts used on the platform, announcing the suspension of the acquisition deal as a result.
However, from Twitter’s point of view, Musk cannot unilaterally suspend the agreement. In a statement published in the Wall Street Journal on Monday, the company confirmed that it remains determined to proceed with the acquisition according to the agreed terms.
It is noteworthy that the question of whether Musk’s allegations give him sufficient reason to withdraw from the deal could end up being decided in court.
Twitter’s stock price has already come under pressure as a result of Musk’s comments in recent weeks, dropping 1.49 percent to $39.56 on Monday after threatening to exit the deal before continuing to fall 6.3 percent in pre-market trading.
The head of the leading electric car company, Tesla, had previously agreed with the company to acquire Twitter for $54.20 per share.
Source: db a
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