Elon Musk accused Twitter of “opposing and frustrating” its right to information about fake platform accounts. Calling it a “clear material violation” of the terms of their merger agreement in a letter to the company on Monday.
“Mr. Musk reserves all rights arising hereunder, including his right not to complete the transaction. And his right to terminate the merger agreement,” reads the letter signed by Skadden Arp’s attorney, Mike Ringler.
Twitter shares fell 5% Monday morning.
Musk withdrew his due diligence when he proceeded to buy the company, ostensibly to speed up acceptance of his offer.
In a letter to Twitter chairman Brett Taylor on April 24: “As we discuss, $54.20 has been and remains my best and last offer, period. It’s binary – my proposal will be accept, or I will leave my position.
Twitter announced the following day that the company had accepted its offer.
But in the weeks that followed, Musk has been vocal in his criticism of Twitter in media interviews and on Twitter, where he has tens of millions of followers.
In May, he announced the company’s $44 billion purchase would not proceed until he received more information about the number of fake accounts on the service.
On May 17, the CEO of Tesla and SpaceX suggested Twitter include insufficient information in its financial documents. He wrote: “My offer is based on the accuracy of Twitter’s documents with the SEC. Yesterday, the Twitter CEO publicly refused to show evidence of <5%. This deal can’t be moved forward until he does.”
He said his team would take samples to count the number of fake accounts. But Twitter’s CEO later explain that non-public information was need to determine the exact number. According to a NEWS, Twitter executives told employees there was “nothing” to delay the deal, according to Musk.
Some analysts have interpreted Musk’s move as a tactic to negotiate lower prices.