Musk threatened to abandon the $44 billion Twitter acquisition because it won’t release information on fake accounts.
According to the billionaire, the company obstructed his access to spam pages information on the platform.
Vijaya Gadde, the company’s chief legal officer, was criticized in today’s SEC filings. He said that he had ‘all rights’ to cancel the merger agreement.
Twitter had claimed that it submitted the details earlier, but Musk dismissed this as comments about how they locate bot accounts.
The businessman has threatened to cancel his lucrative deal. It was temporarily suspended last month as he investigated fake accounts.
He stated that spambots could be responsible for up to half of Twitter’s users. That’s more than 10x the company’s official estimation.
Last month, he also stated that he could not proceed with the purchase until the data requested is received.
Meanwhile Musk’s other ventures – SpaceX and Tesla – have been battered by his Twitter acquisition, with stocks plummeting amid fears he cannot juggle the work.
Elon Musk threatens to renegotiate his deal to buy Twitter. The social media mogul is accused of “resisting” him of access to data about spam accounts and false accounts.
Musk’s lawyer addressed Monday’s letter to Vijaya Gadde as Twitter’s Chief Law Officer. He argued that terms of Musk’s buy agreement require the platform provide requested data. Musk has repeatedly requested this information since May 9.
He also refuted the claim of the company that information is required only for the “limited purpose” of closing the deal.
According to the letter, Musk has the right to ask for and Twitter must provide data and information to meet the business purposes of the transaction.
Musk claims that Twitter is refusing to adhere to its merger agreements. It is further causing suspicions that Musk is hiding the data in order to see what Musk will discover.
Twitter’s bot estimates have been disclosed to the U.S Securities and Exchange Commission (SEC) for many years. However, it also warns that their estimate may be low.
Musk’s attorney sent a letter to Twitter’s Chief Legal Officer, Vijaya Gadde, on Monday
Last month, Musk said he wanted to pause on the purchase deal to verify false or spam accounts represented fewer than 5 percent of the company’s 229 million users during the first quarter, as Twitter reported.
Twitter would report that less than 11.4million fake accounts are being targeted by ads if their reporting is accurate.
He and his team wanted their own audit of 100 followers on Twitter to see if any are bots or spam accounts.
In Monday’s letter, Musk stated if Twitter is ‘confident’ in its published spam estimates, he ‘does not understand’ the company’s reluctancy to allow him to ‘independently evaluate those estimates.’
Musk as Twitter’s potential owner is entitled to all the data required to help him prepare for the transition of Twitter’s business under his control and finance his transactions. To do both, he must have a complete and accurate understanding of the very core of Twitter’s business model—its active user base,’ the letter stated.
Musk does not have to justify his request for data nor to submit to new conditions that the company may impose upon his contractual rights to data.
This bot issue also shows a fixation on Musk, who is one of Twitter’s most popular celebrity users. His name and likeness can often be copied by fake accounts that promote cryptocurrency scams.
This billionaire seems to believe that such bots can also be a problem for other Twitter users and advertisers, who place ads on Twitter based on the number of real people they anticipate reaching.
However, some analysts speculate Musk is actually seeking the spam data in an effort to negotiate a lower price for the deal or pull out completely.
Musk can opt out of the Twitter deal in the event that there’s a material adverse effect caused by his company. That is defined as any financial change or modification that adversely affects Twitter’s business.
Financial experts claim Musk can’t unilaterally place the deal on hold, although that hasn’t stopped him from acting as though he can.
Musk might be responsible for paying $1 billion breakup costs if he renounces the merger agreement.
Although Twitter’s Board approved the acquisition in April, shareholders have not yet approved it and closing is unlikely for several months.
Musk was actually the subject of a class-action lawsuit filed late last month against Twitter and Twitter in relation to the Tesla CEO’s purchase of the platform. Musk was accused of stock market manipulation and violating California corporate law.
Musk was accused of profiting financially by not disclosing his share in the platform and by concealing his plan to join the board. Musk turned down the offer of a board seat.
CNBC also obtained the complaint. The complaint states that Musk acquired Twitter shares, while knowing confidential information about company, based on conversations with top executives.
Musk disclosed his Twitter share on April 4, then proposed his $44Billion purchase 10 days later. To secure financing for the deal, Musk sold significant amounts of his Tesla shares.
Both Twitter and Tesla stock prices have declined since his acquisition bid. In wake of Monday’s letter, Twitter saw more than 4 percent drop, to $38.42 per share, during morning trading.
Twitter experienced a more than four percent decline in trading, dropping to $38.42 per shares following Monday’s email
Tesla shares rose 2.98 percent to $725.72 per Share on Monday, after Musk announced that he might not sign the deal to purchase Twitter.
Tesla stock has been trending down since Musk’s bid to acquire Twitter was approved. Analysts claimed that this was due to concerns from investors about the pending deal. If the buyout pulls through, Musk would be in charge of Tesla, Twitter and SpaceX.
Tesla stock rose 2.98% to $725.72 per shares on Monday following the revelation that Musk may walk away from the Twitter purchase agreement.
Musk had originally pledged to borrow $12.5 billion using Tesla stock as collateral in order to purchase Twitter. Musk would also borrow $13Billion from banks, and invest $21B in Tesla equity.
Musk is considered the world’s richest man, having an estimated net worth $246 billion. But most of Musk’s wealth is held in stock.
He was inaugurated in April. A total of $8.5B in Tesla shares was sold His cash commitment to the deal was used to finance it. Musk still held about 16% of Tesla following the sale, an amount that is approximately $119 Billion at current market prices.
Musk’s long-held obsession with the bot issue is also evident in his solution. Musk promised in April that he would ‘defeat spambots or die trying’
With commitments exceeding $7 billion coming from diverse investors such as Larry Ellison, Oracle co-founder and Larry Ellison, he increased his equity stake for Twitter.
Money borrowed from investors reduces the Tesla stock’s value to $6.25 trillion.
Musk is busy apparently securing his twitter deal. However, Musk also spends time cuddling up to his girlfriend Natasha Bassett (27)
They were seen together enjoying dinner at Cheval Blanc, a hotel in Saint-Tropez that charges upwards to $1,300 per night.
While waiters bustled by, they sipped champagne and ate French fries. They then walked hand-in-hand along the expensive restaurant, past sun-seekers at the beach.
Musk is busy apparently securing his twitter deal but he also has been spending time with Natasha Bassett (Australian actress), 27. The pair are pictured enjoying a meal at the Cheval Blanc hotel in Saint-Tropez, France on May 29
Bassett and Musk, Musk’s youngest girl, are thought to have met in February. Pic of the couple walking down a Saint-Tropez shore.
Bassett was pictured last week on Instagram from one of her hotel balconies
The billionaire also confirmed last month that he will switch political allegiances and vote for the Republican party in the next election, after casting his ballot ‘overwhelmingly’ for the Democrat party in the past.
This South African-born entrepreneur holds US citizenship and is currently registered as an independent voter.
Musk, however, has shown a tendency to the right in recent years and especially when discussing Twitter’s takeover.
Additionally, Musk is apparently in a dispute with President Joe Biden. Biden dismissed Musk’s claim that he felt’super bad’ about America’s economy on Friday.
Musk spoke via videolink at a Miami tech summit in May and confirmed that he will be switching his vote to Republican from Democrat.
When probed about the billionaire’s remark during a press conference, Biden scoffed: ‘Lots of luck on his trip to the moon.’
Biden stated that he was seeing encouraging signs in the U.S. economic recovery.
‘Well let me tell you, while Elon is talking about that Ford is increasing their investment overwhelmingly,’ Biden stated. ‘I think Ford is increasing in building new electric vehicles, 6,000 new employees – union employees, I might add, in the Midwest.’
Biden stated that “The ex-Chrysler Corporation, Stellantis” is also investing in electric vehicles. “Intel had added 20,000 new jobs in computer chip manufacturing.”
Musk responded to the tweet moments later with, “Thanks Mr. President!” and shared a NASA press release announcing SpaceX had won the contract to take American astronauts back to the moon.
DealBook said that Musk and Biden started their feud more than a decade ago when Biden had backed unionization and auto unions in general.
He also supported the bill to benefit unionized electric car makers, albeit at the cost of others like Tesla.
Biden has also been a frequent promoter of Ford’s hiring efforts, but failed to mention that Tesla had hired over 50,000 people globally in the past two years.
An analyst believes that Biden and Musk have similar policies, particularly in the area of technological innovation and green power. Biden could have difficulty advancing his agenda on highly-contested topics without Musk’s support.
Musk sent a tweet moments later saying, “Thanks Mr. President!” Musk shared the NASA press release in which SpaceX was awarded the contract to send American astronauts to the moon.