SAN FRANCISCO, June 6 (US): Elon Musk warned Monday that he could walk away from his $44 billion bid to acquire Twitter Inc if the social network fails to provide data on spam and fake accounts.
In a message to Twitter, the billionaire reiterated his request for details on both accounts and said he reserves all rights to terminate the merger because the company was in “clear material breach” of its obligations not to provide him with information, Reuters reports. .
Twitter shares fell 5.5% to $38.13 and traded at a steep discount against Musk’s offer of $54.20 per share, indicating that investors did not expect the deal to close at the agreed-upon price.
Twitter did not immediately respond to a request for comment.
This is the first time that Musk has threatened to walk away from the deal in writing rather than broadcasting it on the social media platform Twitter.
According to the letter, “Musk believes that Twitter is transparently refusing to comply with its obligations under the merger agreement, which causes further suspicion that the company is withholding requested data.”
Twitter previously played down Musk’s warning that the deal was “on hold,” arguing that the data would help him prepare for his ownership of Twitter and that it was not intended to conduct due diligence and reopen negotiations. Read more
Earlier in May, Musk said he would put the deal on hold “temporarily,” while he waits for the social media company to provide data on the percentage of its fake accounts.
In response, Twitter CEO Parag Agrawal said that the most advanced spam campaigns use a combination of humans and automation and that he doesn’t believe accounts can be done externally, because they require public and private information that Twitter can’t share.
In his letter, Musk said he needed the data to conduct his own analysis of Twitter users and did not believe in the company’s “lax testing methodologies”.
“He’s trying to walk away from the Twitter deal, this is his first shot across the arc,” Wedbush analyst Dan Ives said.
Musk, a self-proclaimed free-speech absolute who owns 9.6% of Twitter and is its second-largest shareholder, said one of his priorities would be to remove “spamware” from the platform.
The Tesla chief also secured financing for the deal and attracted major shareholders, including Saudi investor Prince Alwaleed bin Talal and Sequoia Capital.
The letter from Musk’s lawyer was directed to Twitter’s chief legal officer, Vijaya Jade.