Musk threatens to drop Twitter deal if fake account data is not provided

June 6 (Reuters) – Elon Musk warned on Monday that he might abandon his $44 billion offer to acquire Twitter. (TWTR.N) If the social network fails to provide data about spam and fake accounts.

In a message to Twitter, the billionaire reiterated his request for details of the bot’s accounts and said he reserves all rights to terminate the merger because the company was in “clear material breach” of its obligations by not providing him with the information.

Twitter shares fell 5.6% to $37.92 and were trading at a steep discount against Musk’s bid of $54.20 per share, indicating that investors did not expect to close the deal at the agreed-upon price. The stock was last down 2%, while Tesla was up 1.2%.

Register now to get free unlimited access to Reuters.com

“Twitter has and will continue to collaboratively share information with Musk to complete the transaction in accordance with the terms of the merger agreement,” the company said in a statement.

Twitter added that it intends to close the deal at the agreed price and terms

Musk suspended the deal “temporarily” in mid-May, saying he wouldn’t go ahead with the offer until Twitter showed evidence that spam bots represented less than 5% of its total users.

Since then, the acquisition saga has seen many twists and turns, raising questions about Musk’s intentions to complete the deal at the set price.

Although Musk has extensively used the social media platform to express his views on the deal and the company, this is the first time he’s officially threatened to quit.

“It’s pretty clear he has buyer’s remorse and he’s trying anything to get a price cut, and I think it might work,” said Dennis Dick, proprietary trader at Bright Trading LLC.

“You can see the sell-off in social media stocks and he realizes he’s overpaid… All these are tactics just to get a price cut.”

Musk has questioned the accuracy of Twitter’s public filings about spam accounts, claiming they must be at least 20% of the user base. Twitter disagreed, with CEO Parag Agrawal detailing how the company handles spam accounts in one of his recent tweets.

A self-proclaimed free-speech autocrat, Musk has declared that one of his priorities will be to remove “spam bots” from the platform. Tesla Corporation (TSLA.O) The CEO owns 9.6% of Twitter and has more than 95 million followers on the network.

As part of the deal, Musk is contractually obligated to pay $1 billion in breakup fees — part of his $219 billion fortune estimated by Forbes — if he does not complete the deal. Twitter could sue a “specific performer” to force Musk to complete the deal and obtain a settlement from him as a result. Read more

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.

See also  Autos CEO warns of battery scarcity as competition for electric vehicles intensifies

Musk has lined up with several prominent investors, including Saudi investor Prince Alwaleed bin Talal and Sequoia Capital, to finance the deal.

Elon Musk threatens to walk away from the deal
Register now to get free unlimited access to Reuters.com

(Nivdita Balu reports in Bengaluru); Additional reporting by Teyashi Data. Written by Sweta Singh. Editing by Anil de Silva

Our criteria: Thomson Reuters Trust Principles.

Leave a Reply

Your email address will not be published.