Elon Musk Voices Twitter Buyout Concerns in a Letter Citing ‘Clear Material Breach’ of Merger Terms

In a letter sent to Twitter's Chief Legal Officer Vijaya Gadde, Elon Musk continues his line of threatening to cancel the deal outright on the notion of increased spam accounts infecting the site. Through Musk's lawyer, Mike Ringler of Skadden, the official document conveys considerable importance on the matter, highlighting Musk's entitlement to the data in question, despite his previous waiving of due diligence amid the initial $44 billion Twitter deal.

Musk's letter relays the necessity of the data in question due to the various financers involved behind the Tesla executive, which sits at around 19 different investors. Musk has likewise noted key individuals, like Twitter co-founder Jack Dorsey, as being potentially involved in backing the deal, as well as several other current Twitter shareholders.

"To the contrary, Mr. Musk is entitled to seek, and Twitter is obligated to provide, information and data for, inter alia 'any reasonable business purpose related to the consummation of the transaction,'" the letter reads. "At this point, Mr. 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 Mr. Musk's own analysis of that data will uncover."

Following approval in April, the Twitter buyout has hindered Musk's growing wariness in the potential number of spam accounts utilizing the site for untold reasons, most prominent among them being to sway opinions on popular internet happenings. Look no further than the Johnny Depp versus Amber Heard drama, which held "serious bot activity," according to writer and investigative analyst Alexa O'Brien.

Similarly, Musk's own ambitions with Twitter were encompassed in its own swirling muck of spam and bot activity that leaned entirely anti-Musk, according to Andrea Stroppa, whom Musk even responded to with "Interesting," when heading these discoveries on the social media site. But, Musk himself seemingly has his own rally of bot-led accounts as witnessed within his 96 million followers, which SparkToro data suggests could be nearly 70% spam.

In mid-may, Musk relayed that the Twitter deal would be "temporarily on hold" following accusations that Twitter's own metrics of spam accounts amounting to a mere 5% were dramatically understated. While he remained "still committed to the acquisition," some others have speculated that he may likewise be seeking to lower the price of the deal, which comes with its own $1 billion contingency if either party backs out of the agreement.

Additionally, Twitter itself could sue Musk for forcing the transaction to go through. In a statement headed on Monday, a Twitter spokesperson explained the firm "will continue to cooperatively share information with Mr. Musk to consummate the transaction in accordance with the terms of the merger agreement," adding with some firm underpinnings that Twitter will "close the transaction and enforce the merger agreement at the agreed price and terms."

Musk has been quite vocal about the bot activity on the media site, going so far back as even 2018, wherein he voiced similar concerns amid a string of replies to a CNET post. More recently, in replies to Twitter's own 5% bot account projections, Musk equated the number to a whopping 20% potential, additionally citing in that same tweet that "Twitter's CEO publicly refused to show proof of <5%. This deal cannot move forward until he does."

In his letter sent on Monday, Musk noted that any data purveyors would be opted into a nondisclosure agreement if Twitter is willing to share the information, and if the deal were not to close even with the data given, he would not use said, "competitively sensitive information." On Monday, the Twitter stock dipped below 5% and currently sits at $39 a share. The Twitter deal would see Musk scooping up the company for $54.20 per Twitter stock, already a hefty premium posited by some investors.