American rebel billionaire Elon Musk accuses the social network Twitter of hiding information about fake accounts and spam.
In a letter to Twitter’s general counsel posted on the website of the US Securities and Exchange Commission, Elon Musk says that Twitter’s lack of information about fake accounts and spam is a clear violation of the social network’s obligations as part of its $44 billion takeover bid.. and filed last April. For weeks, the CEO of Telsa and SpaceX has wanted to make sure that bots represent less than 5% of Twitter users, as stated in numerous public documents, when he estimates that fake accounts represent at least 20% of all users.
“Musk believes the company is actively resisting and thwarting his information rights… under the merger agreement. This is a clear material breach of Twitter’s obligations…Musk reserves all rights resulting therefrom, including his right not to consummate the transaction…”pic.twitter . com/YxZ8B8awg4
Twitter said in a statement that it “shares and will continue to co-exchange information”with Elon Musk. The company, led by Parag Agrawal, also said it believes the deal is in the best interest of all shareholders and that it intends to “complete the transaction and implement the merger agreement at agreed prices and on agreed terms.”Shares of Twitter fell 1.49%, adding to doubts that Elon Musk could complete his $54.20 a share offer and further widening the gap between market expectations and the billionaire’s bid. The stock has barely — and only briefly — topped $50 since Elon Musk launched his buyback plan.
Can Twitter really escape Elon Musk?
The proposed Twitter takeover includes a $1 billion severance package for each side, but Elon Musk can’t just walk away paying that fee. The merger agreement includes a special enforcement clause that allows Twitter to force Elon Musk into a deal, according to the original documentation. This could mean that, if the case goes to court, Twitter could get an order obliging the billionaire to complete the merger, rather than seek monetary compensation for any breaches of it.
The inquiries about the bots have led analysts to suspect he is using them as a negotiating tactic to lower the price as tech stocks have tumbled in recent weeks, or to pull out of the deal altogether. Elon Musk’s attorney, Mike Ringler of Skadden, Arps, Slate, Meagher & Flom, said Twitter needed to cooperate with the requested data so that his client could secure the debt financing needed to close the deal.