Elon Musk’s acquisition of Twitter has met another snag: the deal has been put on hold while Musk and his team try to estimate the number of bogus accounts (bots), but they need more data from the company to do so. Twitter has reportedly declined to disclose data.
Musk is now threatening to pull out of the agreement. “This is a clear material breach of Twitter’s obligations under the merger agreement, and Mr. Musk reserves all rights resulting therefrom, including his right not to consummate the transaction and his right to terminate the merger agreement,” his attorney, Mike Ringler, writes in a letter to the SEC.
According to the letter, while Twitter’s official filings say that less than 5% of accounts are fraudulent, “Mr. Musk has made it clear that he does not feel the company’s lax testing techniques are appropriate, hence he must do his own study.” The information he has asked is required to do so.”
“At this point, Mr. Musk feels Twitter is clearly refusing to comply with its duties under the merger agreement,” according to the letter. If you’re interested, you may read it in its entirety on the SEC website.
Twitter’s methodology and test results are based on internal data that only Twitter has access to. It’s impossible to estimate the percentage of bot accounts without that information.