Musk threatens to kill Twitter deal over alleged lack of user data transparency - TechCrunch

Musk threatens to kill Twitter deal over alleged lack of user data transparency – TechCrunch

In a new filing for the SEC this morning, Twitter shared a message it received from Elon Musk’s legal team indicating its dissatisfaction with information provided by the company regarding the level of “spam and fake accounts” on its service. It’s the same concern that the tech entrepreneur has widely publicized since the deal to buy the social media platform was settled earlier in the year.

According to the letter – which you can read in full here – Musk is “Twitter’s latest offer to simply provide additional details regarding the company’s testing methodologies, whether through written materials or oral explanations, [as] equivalent to rejection [his] Data requests,” which the SpaceX and Tesla CEO says will help “facilitate his assessment of spam and fake accounts on the company’s platform.”

The letter says that more data (not just an explanation of how existing data is being collected) on non-human Twitter users – whether natural or spam – is important to help close the transaction from a funding perspective. “As the potential owner of Twitter, Mr. Musk is clearly entitled to obtain the data required to enable him to prepare for the transfer of Twitter’s business to his ownership and facilitate the financing of his transactions,” the letter reads.

At the end of the short correspondence, Musk’s legal team threatens to cancel the deal (confirmation: TechCrunch):

Based on Twitter’s behavior to date, and the company’s most recent communications in particular, Mr. Musk believes that the company is actively resisting and thwarting his information rights (and the company’s corresponding obligations) under the merger agreement. This is a material breach of Twitter’s obligations Under the merger agreement and Mr. Musk reserves all rights resulting, Including his right not to complete the transaction The right to terminate the merger agreement.

Really fighting words.

Following Musk’s various moves to initially influence the social network, and later to buy it in bulk, the controversial poster made a number of claims about how Twitter counts non-human users. Musk went so far as to tweet the fecal-themed emoji at Twitter’s CEO on the social service, after Parag Agrawal penned a theme about how the company deals with spam and bots.

The pace at which Musk went from charging his head to forcing Twitter to accept his offer, valuing the company at $54.20 per share, to attacking the company, its leadership and data on non-human users, was fast — and many speculated that it was indicative. His desire not to complete the transaction at the agreed price. Since the deal went into effect, the value of tech stocks has fallen broadly, making the deal look more expensive over time.

We now have, from Musk’s team, a clear threat that he might walk away if he doesn’t get more information. Whether the demands of Musk in good faith we leave it to you. But the situation raises an interesting dilemma. If the tweet Do If you want to force Musk to pay at the agreed rate, he may give away and share more data. But if it does, what stops Musk from posting on Twitter about the information that was revealed? His letter says he will “of course comply with the limitations set forth in Section 6.4, including ensuring that anyone reviewing the data is bound by a non-disclosure agreement”, but is anyone taking this claim seriously?

Fortunately, if Twitter doesn’t want to sell to Musk—remember that the company originally enacted a pill defense to fend off his overtures—it simply can’t share any other information, allowing its potential buyer to try to wriggle out of a deal.

Investors are betting the latest case is more likely, with Twitter shares selling off this morning, sending the company’s stock value down 5.6% as markets prepare to open.

2022-06-06 13:20:53

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