Smooth, Six paragraph letter to Twitter On Monday, the lawyers of the world’s richest man, Elon Musk, expressed their displeasure.
Mr. Twitter. “Vigorously opposed and violated” Musk’s rights. $ 44 billion deal to buy social media service, The lawyers wrote. They said the company “denies Mr. Musk’s data requests” to publish the number of fake accounts on its site. This is tantamount to a “clear breach of contract”, the lawyers continued, giving Mr Musk the right to terminate the contract.
The letter was delivered to Twitter and filed with the Securities and Exchange Commission, Mr. to stop blockbuster acquisition. Increased Musk’s campaign. After signing a deal to buy Twitter in April, Mr. Musk, 50, repeated Recommended He may want to cancel the purchase. Monday’s letter contained more direct words about his will.
Mr. It added another level of uncertainty as to whether Musk would complete the deal, even though he had waived his rights to due attention on Twitter when he bought the deal. The letter also raised the possibility of a contentious legal battle if one party takes the matter to court. Mr. If Musk follows that path, the terms of the deal give Twitter the right to force him to complete the acquisition if his loan financing for the purchase remains the same.
The letter also prompted some to roll their eyes. The electric car maker is led by Tesla and SpaceX, a rocket company. Musk, popularly known as Mercury and Often his wheeling and dealingHis latest gamble was completely unexpected.
“It’s a move that Twitter investors have been melting down for weeks, and Elon Musk’s false rumors in tweets have been leaked as an official letter to regulators,” wrote Susanna Streeter, a senior investment and market analyst at Horkrews Lansdowne. “The glove should always be a flat ride.”
Mr. Twitter. Musk said sales will definitely continue. “We intend to complete the transaction and execute the merger agreement according to the agreed price and terms,” a spokesman said, adding that the company “will continue to share information with Mr Musk to complete the transaction.”
Behind the scenes, Mr. Twitter. Has shared information with Musk for a month without any interruption, said someone who knew the situation and did not want to be named because the discussions were confidential.
Sean Edgett, Twitter’s general consultant, sent an email to employees Monday morning reiterating the company’s commitment to concluding the deal, according to a copy of the memo obtained by The New York Times.
Shares of Twitter fell 1.5 percent to $ 39.56 on Monday, well below the $ 54.20 price per share.
For a request for comment, Mr. Musk did not respond immediately.
He has been complaining for weeks about fake Twitter accounts and bots. Musk seemed to get some drag on the issue with others. Mr. to Twitter. After Musk’s letter was made public on Monday, Ken PaxtonTexas Attorney General, he said Opens an inquiry His office said in a statement that the company was “misleading Texans in the number of its ‘bot’ users”.
Mr. Twitter declined to comment on Paxton’s investigation.
Mr. to buy Twitter in April. When Musk agreed, he said he wanted to take the company to the private sector and allow more free speech on stage and improve service features. But in a few weeks, the stock market plummeted due to inflation, the Ukraine war and supply chain challenges.
The fall has affected shares of companies such as Tesla, Mr Musk’s main source of wealth. This turmoil has also plagued the credit markets, making it difficult for banks to sell the generally elevated debt to finance the acquisition. Analysts speculate that these factors may have contributed to Mr Musk’s buyer’s spending of $ 44 billion on social media..
In recent weeks, Mr. Musk threatened to “shut down” the Twitter deal and the number of its fake accounts. He had tweeted last month.The deal cannot go aheadAs Twitter has repeatedly stated, these accounts account for less than 5 percent of its users until Twitter shows “evidence”. He made similar comments at a conference in Miami, pointing out that he might try to lay the groundwork for rework of the deal.
In doing so, Mr. Musk seemed to make a case for arguing that Twitter had experienced a “material adverse change” that would significantly affect its business, allowing it to terminate the deal. Nevertheless, legal experts have questioned the validity of that argument, especially since Twitter has long revealed that fake accounts represent 5 percent of its users.
On Monday, Mr. Musk’s letter suggests a new strategy. Instead of simply saying that the millionaire did not trust Twitter’s numbers, his lawyers said in the letter that the company was violating its obligations, with the information that he considers crucial to the deal. The number of its bots.
For more information on how Twitter measures spam and fake accounts on its site, see Mr. Lawyers wrote that Musk had “repeatedly” demanded that “he make it clear that he did not believe the company’s loose testing methods were adequate, so he should conduct his own trial.” Own analysis. “
How Elon Musk’s Twitter deal came to light
A blockbuster deal. Elon Musk, the world’s richest man, has shut down what appeared to be an impossible attempt by the famous Mercury billionaire. Buy Twitter for about $ 44 billion. Here’s how the deal turned out:
They said Twitter’s cooperation was necessary to protect the loan funds that the banks had pledged to finance the deal. Morgan Stanley and other lenders promised $ 13 billion Mr. In debt to pay for Muskin’s acquisition. Those pledges are governed by the same legal agreements as the contract.
“What he’s really doing is a very clever attempt to get out of the merger deal,” said Ann Lipton, a professor of corporate governance at Thule Law School. “If Twitter is really stonewalling information requests, if those information requests are necessary or justified for Musk to receive his funding – this is what he says in this letter – then it would be a violation to allow Musk to walk away.”
Twitter, mr. It could be argued that Musk did not have the information he was seeking or needed to conclude the deal, he said.
Agreement Oct. It is expected to be completed within 24. If it does not end by then, on both sides Can move away. If the transaction is delayed by regulatory approvals at that time, Mr. Musk and Twitter will have six more months. The agreement includes $ 1 billion in dividends to both parties, subject to certain conditions.
In many respects, the deal would otherwise appear on track. Last week, Twitter announced it Got regulatory approval From the Federal Trade Commission to pursue its sale.
At the forefront of funding, Mr. Musk revealed A filing Last month he canceled a planned loan against Tesla’s shares and raised his personal cash commitment to the deal. He too He said he was in talks with other Twitter partners. Including the company’s co-founder Jack Dorsey, about rolling into the company after they personally took over the existing shares.
According to Twitter, terminating the deal is existential. The company is facing difficulties in delivering consistent financial results and increasing the number of its users.
Barak Agarwal, Twitter’s chief executive, cut the company’s optional spending last month and disabled new hiring. From Took charge in November, He has shaken up the company’s top rankings and has plans for further changes. He also asked staff to try to stay in the study.
“I know we are going through a period of uncertainty,” he told a recent corporate meeting. “We turn our attention to our work.”