Tesla CEO Elon Musk has officially backed out of his deal to acquire Twitter.
According to a filing with the SEC, Musk says Twitter has not complied with its contractual obligations, failing to provide the data and information needed for him to assess the prevalence of fake or spam accounts on the platform.
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” (our letter to you dated May 25, 2022 (the “May 25 Letter”)). 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. Twitter has failed or refused to provide this information. Sometimes Twitter has ignored Mr. Musk’s requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr. Musk incomplete or unusable information.
Despite repeated requests over the past two months, Twitter has allegedly failed to provide:
1. Information related to Twitter’s process for auditing the inclusion of spam and fake accounts in mDAU.
2. Information related to Twitter’s process for identifying and suspending spam and fake accounts.
3. Daily measures of mDAU for the past eight (8) quarters.
4. Board materials related to Twitter’s mDAU calculations.
5. Materials related to Twitter’s financial condition.
Additionally, Musk says that Twitter failed to "preserve substantially intact the material components of its current business organization" by firing its Revenue Product Lead and the General Manager of Consumer, laying off a third of its talent acquisition team, and instituting a general hiring freeze. Twitter's Head of Data Science, the Vice President of Twitter Service, and a Vice President of Product Management for Health, Conversation, and Growth have also resigned.
Notably, Bret Taylor, Chairman of Twitter, says the company plans to fight Musk's terminatation of the Merger Agreement.
The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery.
You can read the full letter from Musk's legal team at the link below...
Read More
According to a filing with the SEC, Musk says Twitter has not complied with its contractual obligations, failing to provide the data and information needed for him to assess the prevalence of fake or spam accounts on the platform.
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” (our letter to you dated May 25, 2022 (the “May 25 Letter”)). 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. Twitter has failed or refused to provide this information. Sometimes Twitter has ignored Mr. Musk’s requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr. Musk incomplete or unusable information.
Despite repeated requests over the past two months, Twitter has allegedly failed to provide:
1. Information related to Twitter’s process for auditing the inclusion of spam and fake accounts in mDAU.
2. Information related to Twitter’s process for identifying and suspending spam and fake accounts.
3. Daily measures of mDAU for the past eight (8) quarters.
4. Board materials related to Twitter’s mDAU calculations.
5. Materials related to Twitter’s financial condition.
Additionally, Musk says that Twitter failed to "preserve substantially intact the material components of its current business organization" by firing its Revenue Product Lead and the General Manager of Consumer, laying off a third of its talent acquisition team, and instituting a general hiring freeze. Twitter's Head of Data Science, the Vice President of Twitter Service, and a Vice President of Product Management for Health, Conversation, and Growth have also resigned.
Notably, Bret Taylor, Chairman of Twitter, says the company plans to fight Musk's terminatation of the Merger Agreement.
The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery.
You can read the full letter from Musk's legal team at the link below...
Read More