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According to the letter, Musk, first alleged that Twitter lied to him about the number of spam accounts and bots on the platform, and has severally failed to provide him with the materials he requested for, on many occasions. In addition to withdrawing his merger agreement, Musk’s legal team alleged that Twitter is in “material breach of multiple provisions” after making false and misleading claims about the state of their business, per a letter published by the SEC.
Elon Musk — More Reasons For His Withdrawal
Other reasons for Musk’s sudden need for withdrawal includes detailed data on the number of bots and spam accounts on Twitter, the company’s methodology for calculating user numbers, and backup materials detailing its financial valuation.
“This information is fundamental to Twitter’s business and financial performance and is necessary to consummate” Musk’s buyout, the letter said. “Twitter has failed or refused to provide this information. Sometimes Twitter has ignored Mr. Musk’s requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr. Musk incomplete or unusable information.”
The letter goes on to claim that, despite Twitter’s alleged stonewalling, Musk’s advisors analyzed the number of bots on the platform and determined that Twitter lied about their prevalence. The true number of bots on the platform “is wildly higher than 5 percent,” the letter said, citing “preliminary analysis by Mr. Musk’s advisors of the information provided by Twitter to date.”
Twitter, for its part, has yet to publicly Musk’s allegations but remained committed to sealing the deal. “The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement,” board chair Bret Taylor tweeted on Friday. “We are confident we will prevail in the Delaware Court of Chancery.”
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Elon Musk — Musk’s Reasons For Wanting To Purchase Twitter
Earlier this year, Musk announced his intention of wanting to buy Twitter, and also released the agreed fee for the purchase to be $44 billion.
“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,” Musk said in an April press release. “I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans,” he explained. “Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it.”
Musk, who had previously purchased nine percent of Twitter’s stock shares, later revealed his plans were on hold.
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“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users,” the businessman tweeted in May. “Still committed to acquisition. To find out, my team will do a random sample of 100 followers of @twitter. I invite others to repeat the same process and see what they discover.”
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