After offering to purchase Twitter for $44 billion, Elon Musk is threatening to back out of the deal due to a much bigger bot problem than originally disclosed.
Twitter has recently shared a letter they received from Elon Musk’s legal team. You can read the entire letter here.
In the letter, Musk expresses his displeasure with Twitter’s transparency and limited information on spam and fake accounts.
The letter says that more data (and not just explanation of how the existing data was gathered) on Twitter’s non-human users — both natural and spam — is important for helping close the transaction from a financing perspective. “As Twitter’s prospective owner, Mr. Musk is clearly entitled to the requested data to enable him to prepare for transitioning Twitter’s business to his ownership and to facilitate his transaction financing,” the letter reads.
The letter goes on to say, “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.”
If Twitter doesn’t want to sell to Musk — recall that the company originally enacted a poison-pill defense to fend off his overtures — it can simply not share any more information, allowing its potential acquirer to try to wriggle out of the deal.
Investors are betting that the latter case is more likely, selling shares of Twitter this morning, pushing the value of the company’s stock down by 5.6% as the markets prepped for the open.
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Read more about Elon Musk and Twitter here.
Read the full article on TechCrunch.com.