Elon Musk accused Twitter of breaking his contract by neglecting to deliver information on spam accounts on Monday, threatening to pull out of the $44 billion takeover agreement once more.
According to a scathing letter filed with the Securities and Exchange Commission by attorneys representing the world’s richest man, Twitter has refused to give information that would enable his examination of spam and phony accounts on the company’s platform.
Twitter’s alleged stonewalling, according to Musk’s attorneys, is a clear significant infringement of Twitter’s merger agreement responsibilities.
“Mr. Musk believes the company is actively resisting and thwarting his information rights and the company’s corresponding obligations under the merger agreement. Mr. Musk reserves all rights resulting therefrom, including his right not to consummate the transaction and his right to terminate the merger agreement,” according to the attorneys.
According to a source close to the matter, Elon Musk’s current maneuverings derive from his argument that he has the right to hit the ground running when the Twitter transaction closes, but the social media giant is not giving him the information to do so.
On Monday, Twitter shares ended at $39.56, much below the acquisition price of $54.20 per share, signaling that investors are losing faith in the agreement.
If Musk cancels the transaction, he will be hit with a $1 billion breakup fee as well as the prospect of significant legal fees from a breach-of-contract lawsuit.
He is building a paper trail if he chooses to walk away from the merger in a few weeks by writing a letter to Twitter, according to a hedge fund manager who does not currently hold a Twitter stake.
Notwithstanding Musk’s volley, Twitter has stated that it would not allow the billionaire to escape the terms of the agreement.
Musk has questioned Twitter’s estimate that about 5% of its accounts are spam or bots on many occasions.
In May, Tesla CEO Elon Musk stated the purchase of Twitter was on hold while he awaited further information on spam and bogus account data. He reacted with a poop emoji to a tweet from Twitter CEO Parag Agrawal regarding the company’s efforts to battle bots a few days later.
The business provided Musk more information on how it detects spam bots in an SEC filing last week, but Musk’s attorneys argued the offer was simply an attempt to obscure and complicate the problem.
