Elon Musk has accused social media company Twitter of “thwarting” his analysis of its user base and has threatened to walk away from his high-profile takeover of the business.
Musk had previously raised concerns about the issue of fake user accounts on Twitter and the prevalence of spam, using it as a reason to delay his touted takeover of the social media platform.
He said that delaying the deal meant he could verify a claim by Twitter that less than 5% of the platform’s daily users were spam or bots. However, Musk has claimed that he believes the volume may be greater, even as high as 20%.
“Based on Twitter’s behaviour to date, and the company’s latest correspondence in particular, Mr Musk believes the company is actively resisting and thwarting his information rights,” said a letter sent the US Securities and Exchange Commission (SEC).
With Musk previously claiming his takeover was motivated by concerns that Twitter does not do enough to protect free speech, removing spam bots was one of several key plans for the platform.
The Tesla and SpaceX owner has said he was entitled to measure the volume of spam accounts on Twitter.
“As Twitter’s prospective owner, Mr Musk is clearly entitled to the requested data to enable him to prepare for transitioning Twitter’s business to his ownership and to facilitate his transaction financing. To do both, he must have a complete and accurate understanding of the very core of Twitter’s business model – its active user base,” the letter continued.
In addition, it alleges that while Twitter has offered to provide additional details on how it calculated the volume of spam accounts, this was not sufficient.
“Musk has made it clear that he does not believe the company’s lax testing methodologies are adequate so he must conduct his own analysis,” it noted.
Musk has previously said that should his deal to buy Twitter not go ahead, he would reconsider his position as a shareholder.
“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,” the letter added.
Reneging on the deal could see Musk hit with a $1bn fee.
For its part, Twitter has defended its measurements, and said that it will work with Musk to further the deal. However, it claimed that Musk had waived his due diligence rights to compete the deal.
“Twitter has and will continue to cooperatively share information with Musk to consummate the transaction in accordance with the terms of the merger agreement,” a company statement reads.
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Musk’s deal has not been without controversy. Not long after announcing his acquisition of a 9.2% stake in the company, he was hit with a lawsuit by two Twitter shareholders.
They claimed that an 11-day delay between Musk crossing a 5% ownership threshold, when he would need to report his investment, and his official announcement had cost lost profits.
Musk began buying shares in Twitter in January 2022 and needed to announce he owned 5% of the company by March 24th. However, Musk only filed the paperwork on April 4th.
The announcement pushed up the price of Twitter’s stock by around 27%.
By delaying, the lawsuit claimed, Musk saved around $143 million by purchasing shares at a deflated price, with shareholders selling at a lower price.
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