Musk threatened to pull out of the deal after accusing the company of violating the merger agreement by not providing the data. According to the letter, Musk needs the data to get financing and prepare for the ownership transition.
"Based on the company's behavior to date, and the company's latest correspondence in particular, Mr. Musk believes the company is actively resisting and obstructing his information rights under the merger agreement." It is clear that this is a clear violation of the merger agreement and Mr. Musk has the right to walk away from the deal.
When it approved the transaction and recommended that shareholders vote for it, the board relied on Musk's promise that he wouldn't do business due diligence. The likelihood that other potential acquirers would require substantial due diligence is one reason to approve the agreement, according to the proxy statement.
Musk doesn't have an easy way out. He began to waffle on his commitment to buy the social network last month, saying the deal is on hold pending details supporting calculation that fake accounts represent less than 5 percent of users.
When contacted by Ars today, the company said it would complete the deal. The company said it would continue to share information with Mr. Musk in order to complete the transaction. The agreement is in the best interests of all shareholders. The transaction will be closed and the merger agreement will be enforced.
AdvertisementLess than 5 percent of daily active users are fake, according to the social networking site. Musk's statements referred to different types of calculations, such as the number of bots among all accounts or the number of accounts that post on a daily basis.
The number of real, unique humans that you see making comments on a daily basis onTwitter is above 95 percent according to Musk. All of them don't need to make comments every day in order to be monetizable. The metric includes "accounts who log in or were otherwise authenticated and accessed Twitter on any given day through twitter.com, applications that are able to show ads, or paidTwitter products, including subscriptions"
Musk was aware of the problem before he agreed to buy the social network. In the announcement of the deal, Musk said that one of his main goals was to defeat the fake accounts.
According to Musk's new letter, the latest offer to simply provide additional details about the company's own testing methodologies is akin to refusing Mr. Musk's data requests. Musk's letter argued that he is entitled to more data under the merger agreement.
The letter went on to say that.
Twitter is required to provide data and information that Mr. Musk requests in connection with the consummation of the transaction. Twitter's obligations to provide Mr. Musk with information is not, as the company's June 1 letter suggests, limited to a "very specific purpose: facilitating the closing of the transaction." 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" (Section 6.4). Twitter must also provide reasonable cooperation in connection with Mr. Musk's efforts to secure the debt financing necessary to consummate the transaction, including by providing information "reasonably requested" by Mr. Musk (Section 6.11). Mr. Musk's requests for user data not only satisfies both criteria, but also meets even Twitter's narrowed interpretation of the merger agreement, as this information is necessary to facilitate the closing of the transaction.
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