Musk Hints He Could Walk Away From Twitter Deal Over Bots

Topline

Elon Musk threatened to balk on his $44 billion deal to take over Twitter in a Monday morning letter to the company filed with the Securities and Exchange Commission, accusing the social media giant of violating their merger agreement by refusing an outside analysis on the number of automated accounts on the platform.

Elon Musk attends the 2022 Met Gala in May.

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Key Facts

In a letter addressed to Twitter’s top lawyer Vijaya Gadde, Musk’s lawyers said on the billionaire’s behalf he required more information on the presence of “bots” on Twitter – or else Musk reserves his “right not to consummate the transaction and his right to terminate the merger agreement.”

A Twitter spokesperson said in a statement to Forbes the company still intends to “close the transaction and enforce the merger agreement at the agreed price and terms.”

Shares of Twitter dropped in early Monday morning trading, falling by as much as 5.3% to $38.02, before recovering to $39.44 by midday.

Key Background

Monday’s letter is merely the latest threat from Musk related to bots. Weeks after Twitter accepted his offer to take the company private, Musk tweeted May 13 his deal to buy Twitter was “temporarily on hold” over his skepticism of the company’s estimates of how many bots are on the site, though Musk said at the time he remained “committed to the acquisition.” Twitter CEO Parag Agrawal said in a May 16 tweet the company doesn’t believe an external analysis is possible, to which Musk responded with a poop emoji. Musk is the wealthiest man in the world, according to Forbes’ calculations, worth $221.6 billion.

Big Number

Less than 5%. That’s the proportion of Twitter accounts that are fake or spam, according to the company’s SEC filings last month.

Crucial Quote

“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,” the letter said.

Chief Critic

Wedbush analyst Dan Ives tweeted Monday the letter is the latest evidence Musk is “looking to walk away from deal,” echoing prior analysis that the billionaire is using the issue as a way to walk back on his offer.