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Elon Musk is threatening to pull his $44bn (£35bn) deal to buy Twitter (TWTR) entirely, after the social media company failed to satisfy his demands for information about fake accounts on the platform.
Musk’s legal team has written to Twitter, accusing the social media platform of “actively resisting and thwarting his information rights (and the company’s corresponding obligations), because the social network is refusing to provide data backing up its claims about fake and spam accounts.”
“Mr Musk reserves all rights resulting therefrom, including his right not to consummate the transaction and his right to terminate the merger agreement,” the letter, signed by Skadden attorney Mike Ringler, said.
Musk has been critical of Twitter’s claims that less than 5% of its monetisable daily active users were bots or scammers, warning last month that his takeover was “on hold” while he sought further information.
Twitter has offered to provide more detailed information on its own testing methodologies, either in writing or by speaking to the billionaire. But the world's richest man said that he wanted to do the testing himself, calling Twitter’s testing methodologies “lax”.
He said his team would do a random sampling to calculate the number of fake accounts.
“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 said.
“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,” it continues.
Many analysts have suggested that Musk’s motivations in asking for further information about fake accounts is in either walking away from the deal, or renegotiating the price down.