Moneycontrol PRO
Open App
you are here: HomeNewsBusiness

Elon Musk sends fresh letter to Twitter for termination of acquisition deal, cites 'additional' reasons

The issuance of the letter was reported a day after Musk formally subpoenaed Twitter's whistleblower, seeking documents and communications on the company's bots and alleged security vulnerabilities.

August 30, 2022 / 05:11 PM IST
Tesla chief Elon Musk (Illustration: Moneycontrol)

Tesla chief Elon Musk (Illustration: Moneycontrol)

In the backdrop of a Twitter whistleblower's allegations on bots and security vulnerabilities, billionaire Elon Musk has sent a fresh letter to the social media giant that cited "additional" reasons for the termination of the $44-billion acquisition deal, a regulatory filing disclosed on August 30.

Musk had initially filed a notice with the US Securities and Exchange Commission on July 8, seeking the deal's termination as he accused Twitter of not disclosing the accurate estimate of the spam accounts on its microblogging platform.

“Allegations regarding certain facts, known to Twitter prior to and as of July 8, 2022, but undisclosed to the Musk Parties prior to and at that time, have since come to light that provide additional and distinct bases to terminate the Merger Agreement,” CNBC quoted Mike Ringler, Musk’s legal representative, as stating in the latest letter sent to Twitter’s legal chief.

The exchange filing, which disclosed the issuance of the letter to Twitter, comes a day after Musk formally subpoenaed Peiter Zatko, the whistleblower, seeking documents and communications that support his charges against the company.

Musk sought information from Zatko mostly about the way Twitter measures spam accounts, news agency Reuters reported. The Tesla chief has, over the past couple of months, reiterated that he is walking away from the acquisition deal because Twitter "misled" him and regulators about the true number of spam accounts on the microblogging platform.

Close

But Musk also sought documents and communications from the whistleblower about the alleged attempts to hide security weaknesses, compliance with a 2011 Federal Trade Commission agreement and "Twitter's engagement in any unlawful activity", reports added.

A famed hacker widely known as "Mudge," Zatko ended a stint as the head of Twitter's security earlier this year, and said in his whistleblower complaint that became public last week that the company falsely claimed it had a solid security plan.

The information that Musk obtains from Zatko might lay the groundwork for the Tesla Inc chief executive to introduce new fraud claims in his legal battle with Twitter, according to Ann Lipton, a professor at Tulane University Law School.

However, she said it was unclear if the judge in the Twitter litigation would allow Musk to introduce those claims given the tight schedule for the case and because Musk waived due diligence before signing the deal contract.

A Twitter attorney said at a court hearing last week that Musk's focus on spam as a way to end his agreement to buy the company was "legally irrelevant" because Twitter always said its spam counts were only estimates, not binding representations.

The two sides have sued each other and are heading to a five-day trial on Oct. 17. Musk wants out of the deal and Twitter is asking Chancellor Kathaleen McCormick of the Delaware Court of Chancery to order him to buy the company for the agreed $54.20 per share.

Twitter's stock ended down 1 percent at $40.04 on Monday in New York.

(With inputs from Reuters)
Moneycontrol News
Sections
ISO 27001 - BSI Assurance Mark