In a letter to Twitter Inc on Monday, Elon Musk warned that if the social media network fails to give data on spam and bogus accounts, he may walk away from his $44 billion deal with the firm.
The letter stated that the social media company was in a “clear material breach” of its obligations and that Elon reserves all rights to terminate the merger agreement.
Musk stated in March that he would put the transaction “temporarily on hold” while waiting for Twitter to submit data on the percentage of bogus accounts it had.
“Musk believes Twitter is transparently refusing to comply with its obligations under the merger agreement, which is causing further suspicion that the company is withholding the requested data due to concern for what Musk’s own analysis of that data will uncover,” according to the letter.
“Musk believes the company is actively resisting and thwarting his information rights,” the letter by Musk’s lawyers said.
Twitter shares were down 5.5% at $37.95 in premarket trading.
“Based on Twitter’s behavior to date, and the company’s latest correspondence in particular, Mr. Musk believes the company is actively resisting and thwarting his information rights (and the company’s corresponding obligations) under the merger agreement. 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 says that more data on Twitter’s non-human users — both natural and spam — is important for helping close the transaction from a financing perspective. “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,” the letter reads.