Tech

Elon Musk threatens to end Twitter deal without information on fake accounts.

In a crisp, six-paragraph letter to Twitter on Monday, lawyers for Elon Musk, the world’s richest man, made his displeasure known.

Twitter was “actively resisting and thwarting” Mr. Musk’s rights while he was completing a $44 billion deal to buy the social media service, the lawyers wrote. The company was “refusing Mr. Musk’s data requests” to disclose the number of fake accounts on its platform, they said. That amounted to a “clear material breach” of the deal, the lawyers continued, giving Mr. Musk the right to break off the agreement.

The letter, which was delivered to Twitter and filed with the Securities and Exchange Commission, escalated Mr. Musk’s campaign to terminate the blockbuster acquisition. After striking a deal to buy Twitter in April, Mr. Musk, 50, has repeatedly suggested that he may want to scrap the purchase. Monday’s letter featured the most direct words yet about his desire to pull out and crystallized his legal argument for doing so.

It added another degree of uncertainty to whether Mr. Musk would complete the deal, even though he had waived his rights to do due diligence on Twitter when he bought it. The letter also raised the prospect of a contentious legal battle if one or the other side took the matter to court. If Mr. Musk pursued that route, the terms of the deal give Twitter the right to sue him to force a completion of the acquisition, if his debt financing for the purchase remains intact.

The letter also provoked some eye-rolling. Mr. Musk, who leads the electric carmaker Tesla and the rocket company SpaceX, is famously mercurial and has often winged his wheeling and dealing, making his latest gambit not entirely unexpected.

“This is a move Twitter investors have for weeks been steeling themselves for, the moment when Elon Musk’s haphazard ruminations in tweets have been distilled into an official letter to regulators,” wrote Susannah Streeter, a senior investment and markets analyst at Hargreaves Lansdown. “The takeover was always destined to be a bumpy ride.”

Twitter said the sale to Mr. Musk remained on course. “We intend to close the transaction and enforce the merger agreement at the agreed price and terms,” a spokesman said, adding that the company “will continue to cooperatively share information with Mr. Musk to consummate the transaction.”

Behind the scenes, Twitter has shared information with Mr. Musk for about a month without any breakdown in communication, a person with knowledge of the situation said, requesting anonymity because the discussions were confidential.

Sean Edgett, Twitter’s general counsel, also sent an email to employees on Monday morning reiterating the company’s commitment to closing the deal, according to a copy of the memo, which was obtained by The New York Times.

Twitter’s stock fell 1.5 percent on Monday to close at $39.56, far below the $54.20 price per share that Mr. Musk agreed to pay for the company.

Mr. Musk did not immediately respond to a request for comment.

The San Francisco headquarters of Twitter, which said it intended “to close the transaction and enforce the merger agreement at the agreed price and terms.”Credit…Amy Osborne/Agence France-Presse — Getty Images

Mr. Musk, who has complained about Twitter’s fake accounts and bots for weeks, has appeared to get some traction on the issue with others. After Mr. Musk’s letter to Twitter became public on Monday, Ken Paxton, the Texas attorney general, said he was opening an investigation into the company “for potentially misleading Texans on the number of its ‘bot’ users,” his office said in a statement.

Twitter declined to comment on Mr. Paxton’s investigation.

When Mr. Musk agreed to buy Twitter in April, he said he wanted to take the company private, allow more free speech on the platform and improve the service’s features. But in the weeks since, the stock market has plunged over fears of inflation, the war in Ukraine and supply chain challenges.

The downturn has hit shares of companies such as Tesla, which is Mr. Musk’s main source of wealth. The turmoil has also rattled credit markets, potentially making it harder for banks to sell the debt that is typically raised to finance a takeover. Analysts have speculated that these factors have given Mr. Musk buyer’s remorse about spending $44 billion on the social media company.

In recent weeks, Mr. Musk has threatened to put the Twitter deal “on hold” over its number of fake accounts. Last month, he tweeted that “

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