The tension between Elon Musk Y Twitter continues to rise. This Monday, and through his lawyer, the CEO of Tesla and SpaceX sent a letter to the social network in which he expressed his dissatisfaction with the apparent failure to deliver information on the number of “false and spam accounts” that exist. on the platform. Y threatened to cancel the acquisitionfor an apparent violation of the terms of agreement.
The letter bears the signature of Mike Ringler and has been specifically addressed to vijaya gadde, legal chief of Twitter. In it, Elon Musk reveals his dissatisfaction with a communication received on June 1, in relation to the subject.
“Twitter’s latest offer to simply provide additional details about the company’s own testing methodologies, whether through written materials or verbal explanations, is tantamount to rejecting Mr. Musk’s data requests. […] Mr. Musk has made it clear that he doesn’t think the company’s lax testing methodologies are adequate, so he needs to do his own analysis. The data that he has requested is necessary for this “, indicates the text.
Additionally, Attorney Ringler emphasizes that Twitter is required by the terms of purchase to provide the information that Elon Musk claims. Among the reasons put forward by the tycoon’s legal environment are the need to prepare the transition so that the company remains under his ownership, as well as to facilitate the financing of the purchase; and also gain a general understanding of the core business model of the company founded by Jack Dorsey.
“If Twitter relies on its advertised spam estimates, Mr. Musk does not understand the company’s reluctance to allow him to independently assess those estimates,” the letter added.
Elon Musk and a new confrontation with Twitter
The letter sent by Elon Musk’s lawyer to Twitter has already been integrated into the documentation of the acquisition before the SEC. And what the text makes clear is that the count of bots and fake accounts has become, by far, the main point of conflict between the parties to close the agreement.
Recall that, in May, Twitter reported that fake or spam accounts represent less than 5% of its total users. This was quickly discredited by Elon Musk, who even assured that the purchase would stop until he had details of how that statistic was calculated. The businessman himself estimated the percentage at 20% —or even more—, which opened the door to several controversies about the valuation of the agreement and a possible renegotiation.
What is really noticeable is that Elon Musk’s letter has not been a simple complaint about the lack of cooperation from Twitter. The tycoon has accused the social network of violating the terms of the purchase, which would allow him to cancel it.
Based on Twitter’s behavior to date, and in particular the company’s most recent correspondence, Mr. Musk believes that the company is actively resisting and thwarting his information rights (and corresponding company obligations) under the merger agreement. This is a clear material breach of Twitter’s obligations under the merger agreement and Mr. Musk reserves all resulting rights, including his right not to consummate the transaction and his right to terminate the merger agreement.
Letter from Mike Ringler, Elon Musk’s lawyer, to Twitter
Recently, several analysts speculated that the bot discussion has been an excuse by Elon Musk. to retract the purchase from Twitter; or, at least, to reduce the value of the transaction. Since the agreement was announced for 44,000 million dollars, the doubts about its financing have been several. In fact, the sharp drop in the value of Tesla shares in the hours after the purchase of the social network was made official caused a lot of discomfort among the shareholders of the electric car manufacturer.
Since then, Elon Musk has brought together a diverse group of investors not to expose your other companies in the transaction; especially for the Tesla shares that served as collateral for a loan of 12.5 billion dollars.