Elon Musk released a warning that he might walk away from his $44 billion offer to acquire Twitter Inc. The action will be taken if the social media network fails to hand over data on spam and fake accounts.
In a letter to Twitter, Musk reiterated his request for details on bot accounts and also mentioned that he has all rights to terminate the merger as the company was in a “clear material breach” of its obligations by not providing him complete information.
Twitter shares decreased 5.5% at $38.13 and were trading at a steep discount to Musk’s offer of $54.20 per share.
Twitter did not respond to the request on an immediate basis.
Musk threatened the company for the very first time, which was all about the walk away from the deal in the written format.
As per the letter, “Musk has a strong belief that Twitter is transparently refusing to co-operate with its obligations under the merger agreement, which is directly inviting the suspicion that the company is withholding the requested data.”
Previously Twitter had undervalued Musk’s warning that the deal was “on hold,” arguing the data would help him prepare for his ownership of Twitter and that it was not meant to carry out due diligence and reopen negotiations.
In the month of May, Musk mentioned putting the deal “on hold for a temporary basis, while he waited for the social media company to facilitate his data on the proportion of its fake accounts.
In conversation with this, the CEO of Twitter, Parag Agrawal, spoke that the most advanced spam campaigns used combinations of humans and automation. He did not believe that the calculations could be performed externally because Musk required both public and private information that Twitter could not share.
Musk is striving for the data to conduct his own analysis of Twitter users and does not believe in the company’s “lax testing methodologies.”
Wedbush analyst Dan Ives believes that “Musk is trying to walk away from the Twitter deal.”
A self-proclaimed free-speech absolutist, Musk, who is the owner of 9.6% of Twitter and is its second-largest shareholder, has one of the major priorities is to remove “spam bots” from the platform.
The owner of Tesla Inc has also secured financing for the deal and has pulled in top shareholders, which consists of Saudi Arabian investors Prince Alwaleed bin Talal and Sequoia Capital.
The letter written by Musk’s lawyers was addressed to the chief legal officer of Twitter, Vijaya Gadde.