Elon Musk may walk away from his $44 billion deal to acquire Twitter Inc if the social media network doesn’t provide data on spam and fake accounts, the billionaire warned in a letter to the company Monday.
Twitter was in a “clear material breach” of its obligations and that Musk reserves all rights to terminate the merger agreement, the letter said.
This is the first time Mr. Musk has threatened to waive the deal in writing instead of broadcasting it on Twitter’s social media platform.
Twitter had previously downplayed Mr Musk’s warning that the deal was “on hold”, arguing the data would help him prepare for his ownership of Twitter, not conduct due diligence and reopen negotiations. .
Earlier in March, Mr. Musk said he would put the deal “temporarily on hold” while he waits for the social media company to provide data on the share of its fake accounts.
“Musk believes that Twitter is transparently refusing to comply with its obligations under the merger agreement, raising further suspicions that the company is withholding the requested information,” the letter said.
Musk, a self-proclaimed free speech absolutist, has questioned the veracity of Twitter’s public submissions about spam accounts representing less than 5 percent of its user base, claiming they must be at least 20 percent.
Mr Musk said he needed the data to conduct his own analysis of Twitter users and did not believe in the company’s “lax testing methods.”
“Musk is clearly entitled to the requested data to enable him to prepare for the transfer of Twitter’s business to his property and to facilitate his transaction financing,” his lawyers said in the letter.
Mr. Musk has said he has secured financing for the deal, through equity and loans, attracting top shareholders, including Saudi Arabian investor Prince Alwaleed bin Talal and Sequoia Capital.
Twitter shares fell 5.5 percent to $37.95 in early trading.
Twitter did not immediately respond to a request for comment.