Why Twitter has ignored Elon Musk’s ‘trolling’

A unilateral announcement that the acquisition of Twitter Inc. is “on hold” Criticism of social media company spam account management. A “pop emoji” directed at Twitter’s chief executive Parag Agarwal.

These are just a few of Elon Musk’s tweets over the past four days, culminating in a conference in Miami on Monday that concluded a suggestion by Tesla Inc.’s chief executive that his $ 44 billion deal could be renegotiated at a lower price.

Twitter believes that Musk’s comments violated the disrespectful terms of his Twitter purchase agreement, according to people familiar with the matter.

Yet the San Francisco-based firm has not taken any legal action against Musk, which it sees as a “trolling” of its contract, and plans to do so unless it performs the tasks required to complete the transaction, sources said.

A source close to the deal added that Twitter was trying to “stop the noise”.

According to sources, Musk’s representatives continue to cooperate with Twitter. They are preparing information for submission to regulators, sources said.

Twitter’s proxy statement on Tuesday, which outlines everything its shareholders need to know in order to vote on the transaction, made no mention of Musk’s comments about the deal being stuck or whether it could be done at a lower price.

At the same time, some Twitter executives and advisers are concerned that Musk could lay the groundwork for a renegotiation of the agreement and are preparing to defend the agreement in court, according to sources. They point to Musk’s comments about the deal becoming increasingly negative.

On Tuesday morning, Mask tweeted:

Sources said they did not want to be identified as they were discussing plans for a confidentiality agreement. Representatives from Twitter and Mask did not respond to a request for comment.

Some Twitter leaders were not indifferent to Musk’s comments. Agarwal went on Twitter on Monday to defend the company’s approach to accounting for spam accounts, while Twitter chairman Brett Taylor tweeted on Friday that “we are committed to our agreement.”

Twitter shares closed at 37 37.39 on Monday, 5% lower than where they had traded before the April 4 mask release, and 31% lower at $ 54.20 per share. This indicates that investors consider it highly likely that Mask will re-negotiate the deal at a lower price.

Twitter continues to provide Mask with spam account information, sources said. Musk is entitled to receive this data as part of Twitter’s ownership plan, under the terms of its agreement with the company.

Musk questioned the legitimacy of Twitter’s public disclosure, with the company claiming that these accounts constitute “less than 5%” of its user base. Twitter warns that this is a guess.

Independent researchers estimate that 9% to 15% of the millions of Twitter profiles are bots. Musk said Monday that he suspects they are at least 20% of Twitter users.

One of the concerns on Twitter about sharing information with Musk is that he could violate his non-disclosure agreement with the company and share confidential information about its platform and users, a source said. Musk argued that more information needed to be revealed about how the Twitter platform works.

Abandoned from hard work

Musk, the world’s richest man, gave up due diligence when he agreed to buy Twitter on April 25 in an attempt to get the San Francisco-based company to accept his “best and final offer.”

Since then, technology stocks have plunged into investor concerns over inflation and an economic downturn.

Musk is contracted to pay Twitter a $ 1 billion break-up fee if he does not complete the deal. However, there is a “specific performance” clause in the contract that a judge can cite to force Musk to complete the contract.

In reality, acquirers who lose a particular performance case are almost never forced to complete an acquisition and usually discuss a financial settlement with their goals.

Wadebush has called the deal a “dog-work-homework excuse” to hold back the deal, citing spam accounts in the securities mask, as the company has been making similar statements since its release in 2013.

“The stark reality for Twitter is that no other strategic / financial bidder will come close to this deal, and Musk knows that,” Wadebush analysts wrote.

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