Billionaire Elon Musk may be looking for a legal loophole to get out of his agreement to buy Twitter.
According to The Hollywood Reporter, Musk’s attorney sent Twitter a letter on Monday morning, accusing the social media company of “actively resisting and thwarting his information rights” in providing information about bot and spam accounts. As a result, the Tesla CEO indicated that he plans to “terminate” their agreement if Twitter doesn’t hand over the information he’s requesting.
Elon Musk Accuses Twitter Of ‘Actively Resisting’ His Requests For Information
The letter was sent by a lawyer for Skadden, Arps, Slate, Meager & Flom.
This is only the latest development in his back-and-forth with the Twitter board of directors after accusing them of fudging the numbers when it came to how many bot and spam accounts were really on Twitter, compared to the overall active userbase.
Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of usershttps://t.co/Y2t0QMuuyn
— Elon Musk (@elonmusk) May 13, 2022
The SpaceX founder tweeted last month that the deal was “on hold” until he received more clarity concerning bot and spam accounts; however, it seems that Twitter and Musk have engaged in several behind-the-scenes conversations since that time.
The letter indicates that Twitter sent Musk the information he requested on June 1; however, Musk countered that Twitter isn’t being transparent with the information that they provided.
20% fake/spam accounts, while 4 times what Twitter claims, could be *much* higher.
My offer was based on Twitter’s SEC filings being accurate.
Yesterday, Twitter’s CEO publicly refused to show proof of <5%.
This deal cannot move forward until he does.
— Elon Musk (@elonmusk) May 17, 2022
“At this point, Mr. Musk believes Twitter is transparently refusing to comply with its obligations under the merger agreement, which is causing further suspicion that the company is withholding the requested data due to concern for what Mr. Musk’s own analysis of that data will uncover,” the letter states.
Elon Musk Threatens To Back Out Of Twitter Deal If His Demands Are Not Met
On Monday, the letter sent from the attorney of Elon Musk to the Twitter board indicates that Forbes’ richest man is ready to back out of the deal if Twitter doesn’t disclose the information he wants on his terms.
“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,” the letter states.
At this point, analysts remain divided as to whether Musk plans to back out of the $44 billion dollar deal entirely, or if he is just trying to point to an inflated number of bot and spam accounts to lower the price.
As THR reported, Twitter stock was trading at $40 dollars per share when the market opened on Monday morning, which is far below the $54.20 per share that Musk had initially proposed to Twitter board chair Bret Taylor in his initial text messages.
It could also very well be that Musk is looking to back out of the deal in order to focus on Tesla. Late last week, a series of leaked emails saw Musk demanding that all Tesla employees return to the office for a minimum of forty hours a week.
Those leaked emails can be read here.