Elon Musk accuses Twitter of withholding information, threatens to withdraw takeover bid

The soap opera of the takeover of the social network Twitter by Elon Musk, the multi-billionaire boss of Tesla and SpaceX is not about to end. While reassuring investors last week, the businessman now accuses Twitter of withholding information, and evokes a possible withdrawal of its takeover offer of 44 billion euros.

In a stock filing released on Monday, the tech mogul says Twitter is “actively resisting” his requests for information about bots and spam, which he sees as a clear violation of the social network’s obligations under its buyout offer.

“Elon Musk reserves all resulting rights, including his right not to consummate the transaction and his right to terminate the merger agreement,” reads a letter to Twitter’s chief legal officer posted on the site. from the US Securities and Exchange Commission.

More information needed “to prepare for the transition”

After filing an offer to buy the social network for $ 44 billion in April, the multi-billionaire has repeatedly questioned the data transmitted by Twitter on spam and fake accounts and the measures taken to limit their proliferation. According to Twitter, these account for less than 5% of registered accounts.

“Twitter’s latest offer to simply provide additional details relating to its testing methodologies, whether through written documents or verbal explanations, is tantamount to denying Elon Musk’s claims for data.” written in the letter. However, it is also affirmed, the entrepreneur needs more information to prepare the transition and finalize the financing of the operation.

Lower the price or find a way out

The entrepreneur is looking for means of pressure “in order to lower the price of the offer or completely withdraw if he decides to do so”, suggests Angelo Zino of the company CFRA. The contractor, he recalls, had waived his right to look more deeply into the accounts of the group before the announcement of the agreement. It is increasingly difficult “to imagine a scenario where this is not settled in court”, notes the analyst.

Both parties have pledged to pay severance pay of up to $1 billion in certain circumstances. On the New York Stock Exchange, Twitter shares fell 2.2% to 39.28 dollars at mid-session, far from the price of 54.20 dollars offered by Elon Musk in April. The small magnitude of the decline “reflects the already deep skepticism of investors about the completion of the operation,” said Susannah Streeter, analyst at Hargreaves Lansdown.

The number of fake accounts, a key indicator

Twitter estimates that the number of fake accounts and spam on the social network represents less than 5% of its daily active users. But Elon Musk claims that the methodology used by the platform is not “adequate” and that he must conduct his “own analysis”. He “repeatedly” asked the social network for more information, the letter claims.

Twitter did send a document on June 1, but only to offer additional details on its methodology, it adds. However, the entrepreneur believes that he needs more information to prepare for the transition and finalize the financing of the operation. The precise number of fake accounts is “a key indicator” in a strategy to increase revenue through advertising or paid subscriptions, notes Susannah Streeter.

“How can advertisers know what they are paying? »

After previous criticisms of Elon Musk, the boss of Twitter, Parag Agrawal, had split mid-May of a long explanation on the measures taken to fight against fake accounts. In particular, he indicated that Twitter’s figures, according to which less than 5% of the platform’s accounts are fake, were “based on multiple reproductions of human analyzes of accounts, which are randomly selected”.

The whimsical entrepreneur had responded to these explanations with an emoji in the shape of poop. “How can advertisers know what they are really paying? “, he had also tweeted. “This is a fundamental question for the financial health of Twitter. »

This new episode in the saga of the takeover of Twitter comes after the expiration, Friday, of the deadline granted to the American competition authorities to launch a thorough examination of the operation. They did not seize the file, thus leaving the field free to continue the finalization of the transaction.

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