Elon Musk says Twitter is in a “clear material violation” of their $44 billion acquisition agreement and that he could “terminate” the deal in response. In a letter Sent to Twitter this morning, Musk’s legal team alleges that Twitter has not given him information about the service’s spam bot problem and that he is entitled to that information under the deal agreement.
“Mr. Musk believes that the company is actively opposing its information rights (and the company’s associated obligations) under the merger agreement,” the attorneys write. The letter states that Musk may choose “not to complete the transaction.” because of the alleged breach of contract.
Musk has spent weeks bemoaning the spambot problem on Twitter in what appeared to be a strange attempt to escape a deal he signed barely more than a month ago. Musk previously tweeted that the deal was “on hold” due to concerns about bots and said the deal “cannot continue” until Twitter proves the accuracy of its spam counts.
But it wasn’t until today that Musk officially threatened to pull out of the acquisition, voicing most of his past complaints in tweets and interviews. Wedbush Securities analyst Daniel Ives wrote this morning that the letter indicates that Musk is “looking to run away from” [the] agreement.” Twitter did not immediately respond to a request for comment.
Twitter estimates that less than 5 percent of its daily users are spam accounts. Last month, Twitter CEO Parag Agrawal said the company had provided Musk with an explanation of how Twitter generates its spam estimates. “We shared an overview of the estimation process with Elon a week ago,” Agrawal wrote in mid-May, “and look forward to continuing the conversation with him and all of you.”