Elon Musk has accused Twitter of not providing him with data on fake accounts and spam bots on the popular microblogging platform. Musk is now threatening to walk away from the Twitter deal if the company doesn’t comply with his request.
In a letter to Twitter Chief Legal Officer Vijaya Gadde, Musk’s lawyer Mike Ringler stated, “This is a clear material breach of Twitter’s obligations under the merger agreement and Mr. Musk reserves all rights resulting therefrom, including his right not to consummate the transaction and his right to terminate the merger agreement”.
The letter indicates that the Tesla CEO may not go through with the Twitter takeover, which could result in a legal dispute between the two parties. According to the deal, both parties have agreed that they will pay each other a breakup fee of $1 billion if the deal is not consummated. This doesn’t mean that Musk can simply pay the agreed amount without any repercussions. The original filing states that Twitter can sue Musk to force him to honour the deal.
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“Twitter’s latest offer to simply provide additional details regarding the company’s own testing methodologies, whether through written materials or verbal explanations, is tantamount to refusing Mr. Musk’s data requests,” Musk’s lawyer wrote in a letter to Gadde. “Twitter’s effort to characterize it otherwise is merely an attempt to obfuscate and confuse the issue. Mr. Musk has made it clear that he does not believe the company’s lax testing methodologies are adequate so he must conduct his own analysis. The data he has requested is necessary to do so”, Ringler added.
Legal experts suggest that Musk’s legal team are voicing doubts regarding the numbers shared by Twitter to get away from honouring the $44 billion deal. “This sounds like they’re trying to shoehorn a due diligence termination right into an agreement that does not have one”, David Hoppe, a San Franciso attorney told The Wall Street Journal.