On Monday, Musk threatened to cancel the Twitter acquisition deal, accusing Twitter of violating its obligations under the merger agreement. And it appears that Twitter, which has previously been tough, even to the point of shelving the deal, has finally been threatened into submission.
An attorney representing Musk told the SEC, “If Twitter is confident in its publicly available spam account estimates, Mr. Musk cannot understand why the company is unwilling to allow him to independently evaluate those estimates.”
On June 6, Twitter released a statement after Musk's threat to cancel the deal, saying, “Twitter has worked and will continue to work with Mr. Musk to share information …… We intend to complete the transaction and execute the merger agreement at the agreed upon price and terms.”
According to foreign media reports on June 8, a person familiar with the Twitter company revealed that Twitter will provide Musk and his team with the complete original database from the Twitter platform “Firehose” as early as this week, which includes more than 500 million tweets published every day, including account information, real-time records of tweets and the devices from which users tweeted . The database is currently accessed by more than two dozen companies for a fee.
Musk previously questioned the number of Twitter spam and fake accounts far exceeded Twitter's self-proclaimed 5% ratio, but instead reached a high level of 20%, and argued that this ratio would directly affect the platform's advertising revenue and make its acquisitions lose their true value.
Twitter's number of profitable daily active users (mDAUs) grew 15.9% year-over-year to 229 million in the first quarter of 2022, with 39.6 million active users in the U.S. and 189.4 million international active users. Its advertising business achieved revenue of $1.11 billion in the first quarter, up 23 percent year-over-year.
Musk wants his team to conduct its own random sampling to calculate the percentage of active users and renegotiate the deal with Twitter at a lower price proportional to the true percentage. Previously, Musk offered $54.20 per share to buy Twitter for a total price of $44 billion. Twitter's current share price is $40.45.
Wall Street believes Musk's reason for going after Spam so hard is to use it to lower the price of the deal, or to find an excuse for refusing to buy the company. ” and could face a lawsuit from Twitter and its shareholders.
In another development, Musk's acquisition of Twitter has passed antitrust scrutiny and is expected to close the deal in 2022, pending approval from shareholders and remaining regulators. According to Vijaya Gadde, a lawyer for Twitter, Twitter shareholders will vote in late July or early August on whether to approve Musk's takeover of Twitter.
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