“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 consume the transaction and his right to terminate the merger agreement,” an attorney representing Musk wrote to the company .
Musk has demanded that Twitter turn over information about its testing methodologies to support its claims that bots and fake accounts constitute less than 5% of the platform’s active user base, a figure the company has consistently stated for years in boilerplate public disclosures. Musk has also called for doing his own independent assessment based on Twitter data.
Shares of Twitter fell 5% in early trading Monday. Even before the latest development, Twitter stock was trading well below Musk’s takeover offer of $54.20 per share, likely indicating investor skepticism about the deal going through.
Twitter’s CEO, Parag Agrawal, has stood by his company’s longtime spam metric. In a statement Monday, the company said: “Twitter has and will continue to cooperatively share information with Mr. Musk to consume the transaction in accordance with the terms of the merger agreement.”
The company also said it intends to “close the transaction and enforce the merger agreement at the agreed price and terms.”
Some Wall Street analysts have said this pushback may be a case of buyer’s remorse and an effort to pressure Twitter into negotiating a lower price for the $44 billion deal. There have been questions from the start about how Musk would finance the acquisition. Social media stocks have also taken a hit in recent weeks amid broader market jitters.
Monday’s letter speculated that Twitter may be “withholding the requested data due to concern for what Mr. Musk’s own analysis of that data will uncover.”
The letter also claimed Twitter had sought to restrict access to the information by interpreting the merger agreement narrowly, such that providing the information would fall outside the scope of Twitter’s contractual requirements. But the letter charged that even by Twitter’s narrowed definitions, it still has an obligation to furnish the information.