Posted: Monday, June 6, 2022. 12:41 pm CST.
By Zoila Palma Gonzalez: Tech billionaire and founder of Paypal, Tesla, and SpaceX, Elon Musk has threatened to walk away from his $44 billion offer to acquire Twitter if the social media network failed to provide data on spam and fake accounts.
Musk says that he was entitled to do his own measurement of spam accounts.
After weeks of discussions, Musk says that the deal is now on hold citing that he thinks the spam and fake accounts represent a far greater share than the less than 5% of daily users that Twitter reports.
“As Twitter’s prospective owner, Mr. Musk is clearly entitled to the requested data to enable him to prepare for transitioning Twitter’s business to his ownership and to facilitate his transaction financing. To do both, he must have a complete and accurate understanding of the very core of Twitter’s business model – its active user base,” attorney Mike Ringler wrote in the letter.
However, experts say that Musk may be using this issue in an attempt to renegotiate the price.
BBC report that weeks of market turbulence have reduced the value of many companies, making Musk’s offer of $54.20 per share for Twitter look even more generous.
“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 added.
Musk had already indicated several changes he would make to the social network pending approval of a $44 million deal from the Securities and Exchange Commission (SEC) to acquire the platform.
Among those changes, are open-source algorithms, long-form tweets, and protection of users from spam accounts and bots.
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