Elon Musk files to kill the Twitter deal, Twitter Will Sue

On Friday evening, Tesla CEO Elon Musk finally made it clear that he doesn’t care about adding the “Twitter owner” to his list of nicknames. This step was months in the making. Twitter plans to sue in response.

in message To Twitter’s chief legal officer Vijaya Jade, who filed it with the Securities and Exchange Commission, Musk told the social media company that he was ending the $44 billion acquisition deal he struck in late April. However, it is not yet clear whether Musk can unilaterally terminate the agreement.

Musk focused on the number of spam accounts on the social network. Citing the proliferation of robotic robots, he said first Twitter allegedly violated its merger agreement In early June. Musk’s lawyers argue that the billionaire is reneging on the agreement because “Twitter is in violation of multiple provisions of this agreement and appears to have made false and misleading allegations that Mr.

Twitter plans to sue Musk in response. Twitter CEO Parag Agrawal retweeted Chairman Brett Taylor’s promise to take legal action minutes after word broke in defiance of the Tesla CEO.

Twitter’s board is committed to closing the deal at the price and terms agreed with Mr. Musk and plans to pursue legal action to enforce the merger agreement. Taylor wrote: “We are confident we will prevail in Delaware court.

In an email to employees on Friday he received the edgeShawn Edgett, Twitter’s general counsel, told people not to share any comment on the merger on Twitter or Slack.

“As this is an ongoing legal matter, you should refrain from tweeting, ignoring or sharing any comment about the merger agreement. We will continue to share information when we can, but please be aware that we will be limited to what we can share in the meantime,” Edget wrote. “I know this is an uncertain time, and we appreciate your patience and continued commitment to the important work we do.”

Harvard Law School professor Jesse Fried told Gizmodo in an email Friday that Musk can’t “simply walk away from the deal” and may try to lower the acquisition price.

He’s obligated to buy Twitter if he has enough funding, it seems. Fred said. “Given the contract and Twitter’s post-signing behavior, it is highly unlikely that Musk will get a court in Delaware to grant him a ‘merger-free card.’ His lawyers presumably told him so.”

The news that Musk is backing away from the takeover agreement comes after months of public remorse via Twitter itself. The company says that automated bot and spam accounts make up only 5% of the social network’s users, a number that Musk believes is much higher. he is Request and receive more data on Twitter user base But in the end, he said, the information provided was not enough.

Thursday , Washington Post It reported that the billionaire’s deal to acquire Twitter was in “grave jeopardy” and that Musk had stopped participating in financing discussions. The outlet cited suspicions from Musk’s team about the data provided regarding the number of fake accounts and spam bots Twitter provided to him.

The quarrel with Musk had detrimental effects on Twitter. The company’s share price fell to $36.10 on Friday, well below the $54.20 he provided. company Members of the recruiting team will be laid off on Friday as well, although layoffs have impacted the tech industry significantly as the stock market has plummeted in recent months. Musk cited the layoffs in his deal termination letter as well as several high-profile resignations. In June, amid a wave of chaos in Musk, Twitter said it remained committed to closing the deal and indicated it was not afraid of legal action. When asked about the Washington Post report early today, Twitter repeated its response in June: “We believe this agreement is in the best interest of all shareholders. We intend to close the transaction and enforce the merger agreement.”

Musk, Twitter’s largest contributor, has been acting like a Twitter owner for weeks: He’s taken questions from Twitter employees at Town hallgive them product advice (Make Twitter more like TikTok).

It’s probably all just a catch, Fried said.

“Litigation will be costly to Twitter, and it may agree to lower the price to settle the litigation. Perhaps that is Musk’s game plan here,” the professor said.

Musk’s lawyers delved into more detail about perceived insults and contract violations on Twitter, most of which focused on Blue Bird, which apparently refused to provide or provide incomplete information to the billionaire.

Billionaire accusations They are as follows:

Spam and fake accounts

As expected, Musk complained about the lack of information from Twitter regarding fake accounts and fake Twitter accounts. His attorneys state that the social media company has not provided the following:

“(1) daily global MDAU data since October 1, 2020; (ii) information regarding the MDAU sampling set, including whether the set of mDAU used for spam audits and miscalculations is the same as the set of mDAU used for quarterly reports; (3) ) outputs of each step of the sampling process for each day during the weeks of January 30, 2022 and June 19, 2022; (iv) documentation or other guidance provided to contractor agents used to review mDAU samples; (v) information regarding the Twitter ADAP tool user interface and any internal tools used by contractor agents; and (vi) mDAU audit sampling information, including anonymous information that identifies the contractor agents and quality analyst who audited each sampled account, the assignment made by each contractor agent and quality analyst, and the current status of any accounts classified” penetrating.”

The billionaire said he has not received data on the methodology Twitter uses to suspend spam and fake accounts.

According to the letter, Musk apparently wanted “access to the set of samples used and the calculations made” to determine that less than 5% of mDAU’s Twitter accounts are fake or spam, which the company claims. The order included daily metrics for anti-drug administration units for the past eight seasons. The letter states that the social media company provided “certain summary data” regarding its mDAU accounts, but not the full daily metrics. In addition, Musk requested material submitted to the Twitter board of directors about the accounts of mDAUs. Again, he claims to have received incomplete information.

The letter states, “The preliminary analysis by Mr. Musk’s advisors of the information provided by Twitter to date makes Mr. Musk strongly believe that the proportion of malicious accounts and spam included in the reported MDAU account is well above 5%.”

Materials related to Twitter’s financial situation

Furthermore, the billionaire’s lawyers claim that he is entitled to obtain certain financial data related to Twitter, including information intended to help him secure funding for the deal. Musk claimed to have requested Twitter’s 2022 financial and budget form, an updated draft plan or budget, and a “working copy” of Goldman Sachs’ evaluation form. He reportedly only received a PDF of the painting’s final presentation by Goldman Sachs.

Access to APIs and Query Restriction

When Musk was provided the information, his lawyers claimed it came with “strings attached.” For example, they claim that Musk was not initially granted the same access granted to customers for eight Twitter developer APIs. This was only corrected after clarification of the lack of access to the company.

However, the APIs reportedly contain a “query cap” that prevents Musk and his team from performing the required analyzes of the data. The cap was only removed after Musk complained about it twice.

Twitter fires two high-profile executives, fires people, and freezes hiring

Finally, Musk’s lawyers stated that Twitter was obligated to “keep the physical components of its current business organization largely intact,” something they claim it has not done. The violations in this area started when the Blue Bird app was launched Kevin Bikbor and Bruce Falkits general manager of product and general manager of revenue, respectively, in May.

The letter also refers to Twitter laying off 30% of its talent acquisition team last Thursday and a hiring freeze. As if that wasn’t enough, Musk is also allegedly angry that Twitter didn’t stop the head of data science; Vice President of Twitter Service; and Vice President of Product Management for Health, Conversation and Growth since leaving.

Musk’s lawyers wrote, “The company has not received a guardian’s approval to make changes to the conduct of its business.”

Update 7/9/2022, 6:26AM ET: This post has been updated with information about Edgett’s email for employees.