Elon Musk Has Finally Sued Twitter!
Musk threatens to kill Twitter – Overview
Twitter released a letter from Elon Musk’s legal team this morning in a new SEC filing, expressing dissatisfaction with the company’s given information regarding the level of “spam and bogus accounts” on its service.
This is the same worry that the internet mogul has expressed frequently since his deal to buy the social media network was completed earlier this year.
According to the letter, Musk views Twitter’s “latest offer to simply provide additional details regarding the company’s own testing methodologies, whether through written materials or verbal explanations, [as] tantamount to refusing [his] data requests,” which the SpaceX and Tesla CEO claims will help “facilitate his evaluation of spam and fake accounts on the company’s platform.”
According to the letter, more data (rather than just an explanation of how the present data was collected) on Twitter’s non-human users, both natural and spam, is critical to closing the deal from a financial standpoint.
“As Twitter’s potential owner, Mr. Musk has a clear right to the requested data in order to prepare for the transfer of Twitter’s business to his ownership and to aid his transaction finance,” the letter states.
Mr Musk believes Twitter is deliberately rejecting and undermining his information rights (and the company’s associated obligations) under the merger agreement, based on the company’s recent correspondence in particular.
Mr Musk reserves all rights arising from this clear material breach of Twitter’s merger agreement duties, including the right not to finalize the acquisition and cancel the merger agreement. Fighting words, to be sure.
Musk has made several statements concerning how Twitter counts non-human users after his multiple endeavours, first influencing the social network and then buying it outright.
After Twitter’s CEO, Parag Agrawal, penned a thread on how the company handles spam and bots, Musk went so far as to tweet excrement-themed emojis at him on the social media platform.
Musk’s shift from charging headlong into forcing Twitter to accept his bid, which valued the company at $54.20 per share, to attacking the company, its leadership, and data about non-human users was quick, and many speculated that it was indicative of his desire not to complete the deal at the agreed-upon price.
The value of technology shares has plummeted since the merger was brought into existence, making the transaction appear more expensive as time passes.
Musk’s staff has a clear threat that he will leave if he doesn’t obtain additional details.
However, the circumstance poses an intriguing problem. If Twitter wants to make Musk pay the agreed-upon sum, it might give in and release further information.
But, if it works, what’s to stop Musk from shitposting about the information on Twitter? “Of course, I will comply with the constraints specified under Section 6.4, including ensuring that anyone evaluating the data is bound by a non-disclosure agreement,” he writes, but does anyone believe him?
If Twitter doesn’t want to sell to Musk, the firm used a poison-pill strategy to ward off his overtures; it may simply stop sharing information, allowing its possible acquirer to try to back out of the deal.
Investors are banking on the latter scenario, selling shares of Twitter this morning, bringing the stock’s value down by 5.6 percent as the markets prepared for the open.