{"id":39363,"date":"2022-06-06T20:18:58","date_gmt":"2022-06-06T20:18:58","guid":{"rendered":"https:\/\/harchi90.com\/elon-musk-threatens-to-scrap-44bn-twitter-deal-over-material-breach-elon-musk\/"},"modified":"2022-06-06T20:18:58","modified_gmt":"2022-06-06T20:18:58","slug":"elon-musk-threatens-to-scrap-44bn-twitter-deal-over-material-breach-elon-musk","status":"publish","type":"post","link":"https:\/\/harchi90.com\/elon-musk-threatens-to-scrap-44bn-twitter-deal-over-material-breach-elon-musk\/","title":{"rendered":"Elon Musk threatens to scrap $ 44bn Twitter deal over &#8216;material breach&#8217; |  Elon Musk"},"content":{"rendered":"<div>\n<p class=\"dcr-xry7m2\">Elon Musk has accused Twitter of committing a &#8220;material breach&#8221; of his $ 44bn (\u00a3 35bn) agreement to buy the company and has threatened to terminate the deal, in the clearest indication yet that the world&#8217;s richest man is preparing to walk away from the takeover.<\/p>\n<p class=\"dcr-xry7m2\">Musk&#8217;s lawyers have written to Twitter accusing it of refusing to provide sufficient information about the number of false users on the service, as part of a simmering dispute over the number of spam and fake accounts that populate the platform.<\/p>\n<p class=\"dcr-xry7m2\">In a letter to Twitter&#8217;s chief legal officer, Vijaya Gadde, lawyers representing the Tesla CEO said he believed the company was \u201cactively resisting and thwarting\u201d his rights to access data and information from the company under the agreement.  The letter said Twitter had failed to provide the information requested by Musk since 9 May, adding that a formal response from the social media platform on 1 June was insufficient.<\/p>\n<p class=\"dcr-xry7m2\">&#8220;Twitter&#8217;s latest offer to simply provide additional details regarding the company&#8217;s own testing methodologies, whether through written materials or verbal explanations, is tantamount to refusing Mr Musk&#8217;s data requests,&#8221; said the letter from US law firm Skadden, Arps, Slate, Meagher &#038; Flom .<\/p>\n<p class=\"dcr-xry7m2\">It said Twitter&#8217;s methods for testing fake accounts were \u201clax\u201d and that Musk needed data from the company to conduct his own analysis, as well as to help him secure debt financing for the deal.  It added that the company&#8217;s refusal to cooperate indicated a concern for what Musk&#8217;s analysis might uncover.<\/p>\n<p class=\"dcr-xry7m2\">The letter concluded with a warning that Musk reserved all his rights under the agreement, including his right to walk away from the deal and \u201cterminate\u201d it.<\/p>\n<figure id=\"8446a1b3-c28c-4937-a138-78984182ff7a\" data-spacefinder-role=\"inline\" data-spacefinder-type=\"model.dotcomrendering.pageElements.EmbedBlockElement\" class=\" dcr-10khgmf\"><gu-island name=\"EmbedBlockComponent\" deferuntil=\"visible\" props=\"{&quot;html&quot;:&quot;&lt;iframe id=&quot;business-today&quot; name=&quot;business-today&quot; src=&quot;https:\/\/www.theguardian.com\/email\/form\/plaintone\/business-today&quot; scrolling=&quot;no&quot; seamless=&quot;&quot; class=&quot;iframed--overflow-hidden email-sub__iframe&quot; height=&quot;52px&quot; frameborder=&quot;0&quot; data-component=&quot;email-embed--business-today&quot; title=&quot;Guardian&amp;nbsp;business&amp;nbsp;email sign-up&quot;&gt;&lt;\/iframe&gt;&quot;,&quot;caption&quot;:&quot;Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk&quot;,&quot;isTracking&quot;:false,&quot;isMainMedia&quot;:false,&quot;source&quot;:&quot;The Guardian&quot;,&quot;sourceDomain&quot;:&quot;theguardian.com&quot;}\"><\/p>\n<div data-cy=\"embed-block\" class=\"dcr-1c0p9h5\">\n<p>Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk<\/p>\n<p><iframe id=\"business-today\" name=\"business-today\" src=\"https:\/\/www.theguardian.com\/email\/form\/plaintone\/business-today\" scrolling=\"no\" seamless=\"\" class=\"iframed--overflow-hidden email-sub__iframe\" height=\"52px\" frameborder=\"0\" data-component=\"email-embed--business-today\" title=\"Guardian\u00a0business\u00a0email sign-up\"><\/iframe><\/p>\n<\/div>\n<p><\/gu-island><\/figure>\n<p class=\"dcr-xry7m2\">&#8220;This is a clear material breach of Twitter&#8217;s obligations under the merger agreement and Mr Musk reserves all rights resulting therefrom, including his right not to consummate the transaction and his right to terminate the merger agreement,&#8221; the letter said.<\/p>\n<p class=\"dcr-xry7m2\">Twitter, whose CEO has <a rel=\"nofollow noopener\" href=\"https:\/\/twitter.com\/paraga\/status\/1526237578843672576\" data-link-name=\"in body link\" target=\"_blank\">published a Twitter thread<\/a> explaining how spam accounts are measured and the difficulties of doing so via a third party, said it continued to cooperate with Musk.  It said: &#8220;Twitter has and will continue to cooperatively share information with Mr Musk to consummate the transaction in accordance with the terms of the merger agreement &#8230; We intend to close the transaction and enforce the merger agreement at the agreed price and terms.&#8221;<\/p>\n<p class=\"dcr-xry7m2\">Musk&#8217;s letter, published on the website of the US financial watchdog on Monday, follows a negotiation-by-tweet process undertaken by the billionaire in recent weeks.  On 17 May he tweeted that the deal \u201ccannot move forward\u201d until the spam and fake account issue had been resolved.<\/p>\n<p class=\"dcr-xry7m2\">Fake or spam accounts, known as bot accounts, are automated and not run by human users.  They may use the reply function or direct messages to send adverts or scams to users, or represent attempts to influence public discourse by tweeting political propaganda.<\/p>\n<p class=\"dcr-xry7m2\">Twitter has stated consistently in its quarterly results since 2014 that it estimates its spam account problem to represent less than 5% of its users.  However, since striking the deal in April Musk has raised concerns that the number of false accounts could be much higher.  The platform currently has 229 million users. <\/p>\n<p class=\"dcr-xry7m2\">The formal agreement between Musk and Twitter underpinning the takeover would allow the Tesla boss to walk away from the deal without paying a break fee if there is a material breach, according to Brian Quinn, an associate professor at Boston College law school.<\/p>\n<figure id=\"2293fea3-b96f-4692-a624-9e79c9946ee4\" data-spacefinder-role=\"inline\" data-spacefinder-type=\"model.dotcomrendering.pageElements.EmbedBlockElement\" class=\" dcr-10khgmf\"><gu-island name=\"EmbedBlockComponent\" deferuntil=\"visible\" props=\"{&quot;html&quot;:&quot;&lt;iframe id=&quot;business-today&quot; name=&quot;business-today&quot; src=&quot;https:\/\/www.theguardian.com\/email\/form\/plaintone\/business-today&quot; scrolling=&quot;no&quot; seamless=&quot;&quot; class=&quot;iframed--overflow-hidden email-sub__iframe&quot; height=&quot;52px&quot; frameborder=&quot;0&quot; data-component=&quot;email-embed--business-today&quot; title=&quot;Sign up to the daily Business Today email&quot;&gt;&lt;\/iframe&gt;&quot;,&quot;caption&quot;:&quot;Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk&quot;,&quot;isTracking&quot;:false,&quot;isMainMedia&quot;:false,&quot;source&quot;:&quot;The Guardian&quot;,&quot;sourceDomain&quot;:&quot;theguardian.com&quot;}\"><\/p>\n<div data-cy=\"embed-block\" class=\"dcr-1c0p9h5\">\n<p>Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk<\/p>\n<p><iframe id=\"business-today\" name=\"business-today\" src=\"https:\/\/www.theguardian.com\/email\/form\/plaintone\/business-today\" scrolling=\"no\" seamless=\"\" class=\"iframed--overflow-hidden email-sub__iframe\" height=\"52px\" frameborder=\"0\" data-component=\"email-embed--business-today\" title=\"Sign up to the daily Business Today email\"><\/iframe><\/p>\n<\/div>\n<p><\/gu-island><\/figure>\n<p class=\"dcr-xry7m2\">However, it would be up to a court to declare if there had indeed been a breach, and Quinn said Musk&#8217;s allegation of a breach was weak.  &#8220;That was the basis for all that early talk about the bots being a &#8216;materially adverse disclosure&#8217;.  In the letter, the lawyers use the language &#8216;material breach&#8217; in order to indicate that they might pursue this pathway. &#8220;<\/p>\n<p class=\"dcr-xry7m2\">John Coffee, a professor of law at Columbia University, said Musk was paying the price for trying to rush the deal.  He said he expected the Tesla chief to seek a lower price for the deal although &#8220;Twitter will not concede that much given Musk&#8217;s shaky position&#8221;.<\/p>\n<p class=\"dcr-xry7m2\">\u201cIf Musk had felt that this information about the percentage of bots was critical, he could have negotiated for a representation or done due diligence.  He did neither.  He was in a rush to close and now that market prices have reversed, he is eager to delay, \u201dCoffee said. <\/p>\n<p class=\"dcr-xry7m2\">Twitter shares had fallen 2.5% to $ 39.17 by afternoon trading in New York.  The Musk agreement values \u200b\u200bthe company at $ 54.20 a share.<\/p>\n<p class=\"dcr-xry7m2\">If Musk breaches the deal agreement by seeking to walk away without a reason covered by the document, Twitter has the option of seeking a $ 1bn termination fee from him or asking a court to require Musk to complete the transaction at the agreed price.<\/p>\n<\/div>\n<p><script async src=\"\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Elon Musk has accused Twitter of committing a &#8220;material breach&#8221; of his $ 44bn (\u00a3 35bn) agreement to buy the company and has threatened to terminate the deal, in the clearest indication yet that the world&#8217;s richest man is preparing to walk away from the takeover. Musk&#8217;s lawyers have written to Twitter accusing it of &hellip;<\/p>\n<p class=\"read-more\"> <a class=\"\" href=\"https:\/\/harchi90.com\/elon-musk-threatens-to-scrap-44bn-twitter-deal-over-material-breach-elon-musk\/\"> <span class=\"screen-reader-text\">Elon Musk threatens to scrap $ 44bn Twitter deal over &#8216;material breach&#8217; |  Elon Musk<\/span> Read More &raquo;<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"default","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","spay_email":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true},"categories":[8],"tags":[],"jetpack_featured_media_url":"","jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"fifu_image_url":"https:\/\/i.guim.co.uk\/img\/media\/9150e8a9b39ff9aa7c8cb49bd9902ecc5b137ba0\/130_320_3350_2011\/master\/3350.jpg?width=1200&height=630&quality=85&auto=format&fit=crop&overlay-align=bottom,left&overlay-width=100p&overlay-base64=L2ltZy9zdGF0aWMvb3ZlcmxheXMvdGctZGVmYXVsdC5wbmc&enable=upscale&s=ba8ab8650d92b1ce3fae1bb69ed01e2c","_links":{"self":[{"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/posts\/39363"}],"collection":[{"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/comments?post=39363"}],"version-history":[{"count":0,"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/posts\/39363\/revisions"}],"wp:attachment":[{"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/media?parent=39363"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/categories?post=39363"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/harchi90.com\/wp-json\/wp\/v2\/tags?post=39363"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}