According to a letter delivered to Twitter, Tesla CEO Elon Musk says he will pull out of his 44 billion dollar deal to buy Twitter if the company does not give him more information about the calculation of fake accounts. Musk’s lawyers wrote, “Twitter has, in fact, refused to provide the information that Mr. Musk has repeatedly requested since May 9, 2022, to facilitate his evaluation of spam and fake accounts on the company’s platform.” After threatening to place the Twitter deal on hold due to this issue, some wonder if this represents the end of Musk’s Twitter deal.
Breaking News: Elon Musk threatened to pull out of his $44 billion deal with Twitter, accusing the platform of “resisting” requests for data about fake accounts.https://t.co/CsYvrHAa2N
— The New York Times (@nytimes) June 6, 2022
In the end of the letter, his lawyers state “Based on Twitter’s behavior to date, and the company’s latest correspondence, in particular, Mr. Musk believes the company is actively resisting and thwarting his information rights (and the company’s corresponding obligations) under the merger agreement. 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.”
And Twitter called his bluff. He signed an agreement stating that Twitter's user base numbers were accurate and also waiving his right to due diligence. And now he's doing "due diligence" because he likely doesn't have the money to actually buy it.
— Vincent (@buymoriaking) June 6, 2022
This is not the first time Musk has discussed Twitter’s fake accounts, as he notes that he wants to make sure they make up less than five percent of Twitter users. Now, he feels as if this information is being purposely withheld from him. But, some experts theorize that this represents Musk’s newest strategy in exiting the merger, as New York Times writes “‘If Twitter were really stonewalling information requests, and those information requests were necessary or reasonable for Musk to be able to get his financing — which is what he’s claiming in this letter — then that would conceivably be a breach that allows Musk to walk away.'”
Wowwwwwwww…Didn’t see this coming at all ???? https://t.co/Re9HHCqrTy
— David Alan Grier AKA #LeonMusk (@davidalangrier) June 6, 2022
Although the agreement between Twitter and Musk states the allowance for information, experts remind people that this does not mean he can get any of the information he wants. Some wonder if this points to his buyers’ remorse. The deal is expected to be closed at the end of October when either side can walk away.