Elon Musk tells Twitter he’s ready to go

One of the biggest tech stories of the year is Elon Musk’s proposed takeover of Twitter in a deal that could be worth about $44 billion (opens in new tab). It all happened so fast, and ever since, it looks like Musk has been trying to pull back: after announcing that the deal was “temporarily on hold” thanks to bots (opens in new tab)The billionaire subsequently devoted a considerable portion of his time to shutting down Twitter executives and complaining about the platform’s transparency.

Musk’s legal team sent a new letter to Twitter (opens in new tab) which continues to beat the drum on bots. Dated June 6 and addressed to Twitter’s Chief Legal Officer Vijaya Gadde, the letter reads in part:

“Twitter, in fact, has refused to provide the information that Musk has repeatedly requested since May 9, 2022 to facilitate its assessment of spam and fake accounts on the company’s platform. Test methodologies, whether through written materials or verbal explanations, amounts to refusing Mr. Musk’s requests for data.”

It goes on to say that “Twitter must also provide reasonable cooperation with respect to Mr. Musk’s efforts to secure the debt financing necessary to consummate the transaction, including providing information ‘reasonably requested’ by Mr. Musk (Section 6.11)”. He goes on to cite several other reasons why Musk’s team believes Twitter needs to deliver the data he wants before things take a nasty turn: “At this point, Musk believes Twitter is transparently refusing to comply. its obligations under the merger agreement, which is causing further suspicion that the company is withholding the requested data out of concern about what Mr. Musk’s own analysis of that data will reveal.”

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This is essentially the setup for a warning that will come as no surprise to people following the saga. Musk tweeting about what happened to the deal is one thing: here his lawyers tell Twitter directly that this particular issue could lead to the deal being canceled:

“Mr Musk believes the company is actively resisting and thwarting his information rights […] This is a clear material breach of Twitter’s obligations under the merger agreement and Mr. Musk reserves all resulting rights, including his right not to consummate the transaction and his right to terminate the merger agreement.”

So that makes it official. Only Musk knows what the play is here: it could be that the initial offering overvalued the company and he’s after a cheaper price. It could be that Twitter was an impulse buy, wild as it sounds, and he wants to give it up completely. And back there, a distant third, maybe he really cares about bots.

The deal hinges on Musk putting together a $43.4 billion financial package to pay $54.20 a share on Twitter. At the time of writing, Twitter shares are trading at around $39.50, which is in the context of a broader market downturn that has also hit Tesla: even so, it makes Musk’s initial offering seem generous, to say the least.

But don’t take my word for it: here’s a Wall Street tech analyst who works for Wedbush Securities.

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Twitter CEO Parag Agrawal has remained silent, which is probably for the best: the last time he engaged with Musk in public, Agrawal tweeted about the flaws of external studies on Twitter bots. Musk responded to this tweet with a poop emoji.

So the go-he-won’t-go saga of the billionaire troll continues. If Musk backs out of the deal, he’ll have to pay Twitter a $1 billion ‘cancellation fee’ – although if that’s the case, you can be sure lawyers will spend years haggling over the actual amount. As John Paul Getty, the richest man of his time, once observed in another context: “If you owe the bank $100, that’s your problem. If you owe the bank $100 million, that’s the bank’s problem.” “.

The Twitter takeover seemed like one of the biggest tech stories of the year: but now it’s for very different reasons. Musk seems to be looking for a way out, or at least a lower price – but at the same time maintains tweeting frankly bizarre custom images like this (opens in new tab), which suggest the opposite. If the deal still happens, this might be the first multibillion-dollar corporate takeover that the new owner celebrates with a meme.

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