Elon Musk has accused Twitter of committing a "material breach" of his $44 billion purchase agreement, threatening to terminate the deal, in the clearest hint yet that the world's richest man is planning to walk away from the arrangement.
As part of an ongoing disagreement over the prevalence of spam and fraudulent accounts on the site, Musk's counsel have written to Twitter accusing it of refusing to provide sufficient information regarding the amount of false users on the service.
In a letter to Twitter's top legal officer, Vijay Gadde, lawyers for Tesla's CEO said the company was "actively rejecting and obstructing" his rights to obtain data and information under the agreement.
The letter stated that Twitter had neglected to provide Musk with the requested information since 9 May, and that the social media platform's formal answer on 1 June was insufficient.
The letter from U.S. law firm Skadden, Arps, Slate, Meagher & Flom stated, "Twitter's current promise to provide details regarding the company's testing methodology... is comparable to refusing Mr. Musk's data requests."
Musk's legal team contends that failure to share information regarding fraudulent accounts violates a condition in the deal, a pledge to operate in a certain manner during the selling process, allowing him to walk away from the agreement.
It stated that Twitter's processes for testing false accounts were "loose" and that Musk needed data from the firm to perform his own investigation and acquire debt financing for the transaction.
The statement said that the company's hesitation to cooperate reflected apprehension regarding the results of Musk's analysis.
The letter finished with a warning that Musk reserved all rights under the contract, including the power to "cancel" the deal.
The letter stated, "This is a clear substantial breach of Twitter's commitments under the deal, and Mr. Musk reserves all rights deriving therefrom, including his right not to finalize the purchase and his right to cancel the merger agreement."
Twitter said that it was continuing to work with Musk, who provided a Twitter thread describing how spam accounts are evaluated and the obstacles involved in doing so using a third party.
It stated that Twitter has and will continue to exchange information with Musk in accordance with the terms of the merger agreement. "We expect to complete the acquisition and carry out the conditions of the merger agreement," the company said.
