Elon Musk had already put his acquisition of Twitter on hold in May so he could review the bird app’s fake and spam account data. But now the Tesla CEO has made his threat to pull out of the deal entirely official.
On Monday, via a letter addressed to Twitter’s Chief Legal Officer Vijaya Gadde and made publicly available on the U.S. Securities and Exchange Commission website, Musk accused Twitter of not complying with the terms of their merger agreement and then reminded everyone that he still has the right to drop the acquisition and “terminate the merger agreement” as a result of Twitter’s non-compliance.
The letter, written by attorney Mike Ringler on behalf of Musk, begins with an acknowledgment of a June 1 letter from Twitter that responded to “Mr. Musk’s request for the data and information described in my letters dated May 25, 2022, and May 31, 2022.”
The data being referred to here is apparently Twitter’s fake and spam account data that is used to calculate percentage estimates of how many accounts on the bird app are fake or spam bots. Musk has repeatedly expressed that he doesn’t consider Twitter’s own percentage estimates to be accurate and has requested that Twitter provide him the account data necessary so that he can “conduct his own analysis.”
Musk’s June 6 letter to Twitter says that Twitter’s most recent offer (in response to Musk’s request for the account data), is “to simply provide additional details regarding the company’s own testing methodologies, whether through written materials or verbal explanations…” and is “tantamount to refusing Mr. Musk’s data requests.” (This description of Twitter’s offer does seem to align with the app’s CEO’s recently published tweet thread in which he explains Twitter’s methodology for calculating the percentage estimate of bots and fake accounts on Twitter.)
The letter further asserts that under the merger agreement, Twitter is required to “provide data and information that Mr. Musk requests in connection with the consummation of the transaction” and that Musk believes Twitter is “refusing to comply” with its merger agreement obligations. The letter also states that Musk, if given access to the data he has requested, would ensure that “anyone reviewing the data is bound by a non-disclosure agreement” and that he wouldn’t keep or use “any competitively sensitive information” if the deal doesn’t go through.
The letter ends with a reminder that Musk “reserves all rights” to not buy Twitter and end the merger agreement.
Monday’s letter marks yet another turn in the Twitter/Musk acquisition saga that first became public in early April.
