Musk May Drop Twitter Deal If Fake Account Data Not Provided

Elon Musk’s acquisition of Twitter continues to remain in doubt, after the world’s richest man once again threatened to walk away from the deal.

Musk in a letter sent to Twitter, warned he may withdraw if the microblogging platform does not provide data on spam and fake accounts, Reuters reported.

This is the second time that Musk has threatened to walk away from his $44 billion (£36bn), or $54.20 per share offer to acquire the platform.

Fake accounts

Last month Musk temporarily placed the deal on hold over concerns about Twitter’s estimate of the number of automated bots on the service.

Musk tweeted he was waiting for more information about spam and fake accounts, after Twitter late last month said that less than 5 percent of Twitter users are spam or fake accounts.

Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of usershttps://t.co/Y2t0QMuuyn

— Elon Musk (@elonmusk) May 13, 2022

Musk believes the true figure of fake or bot accounts is closer to 20 percent or more, but critics believe he is simply using this bot issue so as to renegotiate the deal below his $54.20 percent offer.

Twitter’s share price declined to $38.83 as of Monday afternoon.

Twitter’s board of directors however have previously warned they will ‘enforce’ the $54.20 takeover agreement.

Material breach

But now Musk in his letter to Twitter, said the firm was in a “clear material breach” of its obligations, and that Musk reserves all rights to terminate the merger agreement, Reuters reported.

“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,” the letter reportedly states.

Musk reportedly said he needed the data to conduct his own analysis of Twitter users and did not believe in the company’s “lax testing methodologies.”

“Musk is clearly entitled to the requested data to enable him to prepare for transitioning Twitter’s business to his ownership and to facilitate his transaction financing,” his lawyers reportedly said in the letter.

Musk has said that he has lined up financing for the deal, through equity and loans, pulling in top shareholders including Saudi Arabian investor Prince Alwaleed bin Talal (who had initially opposed his bid) and Sequoia Capital.

The prince has a long term stake in Twitter via his investment firm Kingdom Holding Company, which holds 5.2 percent of Twitter.