Elon Musk says he’s withdrawing from his, throwing the social media company’s immediate future into doubt.
In a securities filing Friday, Musk accused Twitter of lying about the number of bots and spam accounts on the platform, as well as failing to provide material he asked for. That includes detailed data on the number of bot and spam accounts on Twitter, the company’s methodology for calculating user numbers and backup materials detailing its financial valuation.
“This information is fundamental to Twitter’s business and financial performance and is necessary to consummate” Musk’s buyout, the letter said. “Twitter has failed or refused to provide this information. Sometimes Twitter has ignored Mr. Musk’s requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr. Musk incomplete or unusable information.”
The letter goes on to claim that, despite Twitter’s alleged stonewalling, Musk’s advisors analyzed the number of bots on the platform and determined that Twitter lied about their prevalence.
The true number of bots on the platform “is wildly higher than 5%,” the letter said, citing “[p]reliminary analysis by Mr. Musk’s advisors of the information provided by Twitter to date.”
Twitter has maintained that fewer than 5% of users are spam or fake accounts for as long as it has been a public company.
Musk said he notified Twitter of its lapses on June 6, meaning the company’s time to hand over the information he demanded is now expired, according to the letter.
Twitter vows to sue
Twitter’s board chair, Bret Taylor, said that the company would pursue legal action to force Musk to complete the sale.
“The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement,” Taylor said on Twitter.
Twitter’s board approved the buyout.
Under the acquisition agreement, Musk is on the hook for a $1 billion termination fee if the deal falls through.
A months-long saga
The mercurial Tesla founder’s move to abruptly pull the plug on the deal is the latest twist in a monthslong drama that pitted the world’s richest person against a globally influential internet company. The contest played out largely on Twitter itself, with each side battling for leverage by strategically releasing information on the platform.
Musk has been haranguing Twitter publicly about the number of bots on the platform, something that has long been a gripe for the social media celebrity with more than 100 million Twitter followers. Musk has also vocally criticized Twitter’s message-posting practices and policies, described the platform as an important forum for free speech in making his play for the company and suggesting he would reverse its ban on formeronce he owned Twitter.
Many technology analysts believe that Musk’s public doubts about Twitter’s solvency — after he entered into a binding agreement to buy it — was a negotiating ploy to. Musk made his initial offer to buy in April, just as the stock market was beginning its prolonged fall, reducing the value of Twitter as well as Musk’s personal fortune, much of which is in Tesla stock.