Read Elon Musk’s letter to Twitter calling off his $44 billion takeover deal

In a letter to Twitter that was filed with the SEC on Friday, Tesla CEO Elon Musk said that he was pulling out of the $44 billion deal to buy Twitter.

After months of back-and-forth negotiations with the company and its board of directors, Elon Musk abruptly canceled his $44 billion Twitter bid in a predictable move.

Since then, the SEC has made public the letter that Musk’s attorneys issued to Twitter Chief Legal Officer Vijaya Gadde complaining that the social media site had neglected to disclose the actual number of phony accounts it was home to.

In the letter, Musk’s attorneys Skadden, Arps, Slate, Meagher & Flom LLP claimed that “Twitter has not complied with its contractual obligations. For nearly two months, Mr. Musk has sought the data and information necessary to ‘make an independent assessment of the prevalence of fake or spam accounts on Twitter’s platform.’”

“This information is fundamental to Twitter’s business and financial performance and is necessary to consummate the transactions contemplated by the merger agreement because it is needed to ensure Twitter’s satisfaction of the conditions to closing, to facilitate Mr. Musk’s financing and financial planning for the transaction, and to engage in transition planning for the business,” the letter stated.

It should be noted, though, that weeks before the arrangement was scrapped, Twitter gave Musk access to its “firehose” of user data.

Experts cautioned in June that it might not be as simple as Musk believed to distinguish between Twitter accounts run by genuine individuals and those run by bots.

Musk estimates that the percentage of spam or fraudulent accounts is closer to 20% compared to Twitter’s claim that they account for about 5% of daily active users.

Giving Musk the data is “more of a shut-up-and-go-away kind of thing than a major concession,” as per Micah Schaffer, a consultant for social media firms on trust- and safety-related problems who has previously worked for YouTube and Snap Inc.

According to Schaffer, Musk “would have to replicate their [Twitter’s] process somehow to credibly dispute their behavior.” despite having access to a lot of data scientists to examine the material provided by Twitter.

 

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