Elon's Financing Deal to Purchase Twitter on Hold Due to Spat Over Requested Info

(AP Photo/Chris Carlson)

Elon Musk temporarily put his effort to buy Twitter on hold while he was waiting for information from Twitter about the fake bot accounts on the site.

Musk had said he reserved the right to back out of the deal and they were in “clear material breach” if they didn’t turn over the information, proving that bots comprised fewer than five percent of users. If Twitter is misrepresenting the number of real people on the site, that affects the value of Twitter because then you wouldn’t have real eyes clicking on any of the advertising.


He is now threatening to walk away again if he doesn’t get the information. He’s trying to force Twitter to give up the information.

In a letter to Twitter on Monday, Musk’s lawyers wrote they have repeatedly asked for the information since May 9, about a month after his offer to buy the company, so he could evaluate how many of the company’s 229 million accounts are fake.

Musk has long been fixated on Twitter’s bot problem as a reflection of the platform’s true value. He has more than 97 million followers.

Twitter said in a statement Monday that it has been cooperatively sharing information with Musk “in accordance with the terms of the merger agreement” and noted that the deal is in “the best interest of all shareholders.”

“We intend to close the transaction and enforce the merger agreement at the agreed price and terms,” it added.

Musk has indicated he doesn’t believe the numbers he’s gotten so far from Twitter. In the letter, he said that he needed the raw data to conduct his analysis and did not believe in the company’s “lax testing methodologies.”

Musk had secured financing to get $2 to $3 billion from a group of equity firms. Now the word is the discussions for the financing are on hold until the situation becomes more clear as to the purchase.

People have been speculating that part of Musk’s reluctance may be to force a better price. He may have them over a barrel regarding their claim about the bot number. If they try to sue him over the deal, he can allege they misrepresented the situation and get information in discovery concerning the real numbers. If they haven’t been honest about the information provided, that’s a big problem. So at some point, they have to fish or cut bait, acknowledge what the truth is, and drop the price. I think that’s what’s going on here. But he also has to get that moving while he still has his financing in hand.


There are a lot of forces — including those within Twitter — that don’t want the deal to go through. But if they don’t go through with it, their stock is going to take a huge hit. So Twitter is caught between a rock and a hard place now.

So it’s getting down and dirty now and we’ll have to see where it goes. Twitter isn’t talking publicly at his point, according to Fox.


Join the conversation as a VIP Member

Trending on RedState Videos