Accusing Twitter of refusing to provide information, Musk ‘threatened’ to end acquisition

From 2022 to the present, Elon Musk and Twitter’s “acquisition saw” naturally has a place in many events that have attracted attention. Changes have also been frequent since Twitter agreed to Musk's $44 billion takeover offer in April.

▲ Picture from: The Guardian

Just a few days ago, in a letter from Musk's team to Twitter Chief Legal Officer Vijaya Gadde and filed with the SEC. Musk has argued that Twitter has not only consistently refused to provide Musk with the information he has repeatedly requested to help him assess spam and fake accounts on the Twitter platform.

And, in the response given by Twitter, the latest proposal involved only providing more details about the testing method the company used itself, whether it was explained in writing or verbally, which was to deny Musk's request for data.

▲ Picture from: GIZMODO

The letter argues that Twitter is trying to obfuscate the issue by describing it in other ways, because Musk has made it clear that he believes the company's lax testing methods are insufficient, so he must conduct his own analysis, and the requested data is a necessary condition for analysis.

The letter also mentions that under various terms of the merger agreement, Twitter must provide the data and information Musk requested in connection with closing the deal. And as Twitter's "potential owner," Musk clearly has access to the requested data, allowing him to prepare for the transfer of ownership of the business and to facilitate financing of his deal.

▲ Picture from: Vanguard News

To do so, Musk must have a complete and accurate understanding of the core of Twitter's business model, its active user base.

In addition, the letter also bluntly stated that Musk believes that Twitter’s apparent refusal to comply with its obligations under the merger agreement raises suspicions that the company is hiding data for fear that Musk will find out through analysis of the data.

Because if Twitter is confident in its public spam estimates, it makes no sense why the company would be reluctant to let Musk do an independent assessment.

▲ Picture from: GIZMODO

What's more, the letter ends with this paragraph: Based on Twitter's behavior so far, Musk believes the company is resisting and thwarting his rights to information under the merger agreement. This is a clear and material breach of Twitter's obligations under the merger agreement, and Musk reserves all rights arising therefrom, including his right not to complete the transaction and to terminate the merger agreement.

▲ Picture from: GIZMODO

After announcing in May that it needed to wait for Twitter to provide data to confirm that its spam and fake accounts accounted for less than 5%, Musk decided to hold off on the Twitter acquisition. Twitter CEO Parag Agrawal has since made several statements on his account in an attempt to address Musk's concerns.

▲ Picture from: Twitter

However, Musk was not satisfied with these explanations, and "replyed" on his account: The transaction cannot proceed until the Twitter CEO shows evidence of <5% proof (spam and fake accounts).

▲ Picture from: Twitter

Now, Musk has revealed a "threat" to terminate the acquisition, and the impact has followed. Shares of Twitter fell 5% in early trading on Monday following the news. Twitter shareholders are also suing Musk, arguing that he has been deliberately using the "hustle" to lower Twitter's stock price.

▲ Picture from: CNBC

There has been speculation that Musk did so because of a fall in Tesla's stock price and possibly what he thought was a high bid for Twitter. Although the real reason for what he did is not known yet, it seems that this acquisition, which has been twists and turns, still seems to have a non-stop turmoil in the future.

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