Musk sends new letter to scrap Twitter deal after whistleblower claims

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Aug 30 (Reuters) – Elon Musk has sent an additional termination letter to Twitter Inc ( TWTR.N ) to include a recent whistleblower complaint from the social media firm’s former security chief as another reason to scrap the deal on 44 billion dollars.

Last week, Peiter Zatko, a well-known hacker known as “Mudge”, said in his complaint that Twitter prioritized user growth over reducing spam and falsely claimed it had a solid security plan. read more

If the allegation is true, then Twitter has violated some of the provisions of the merger agreement, Musk and his legal team said in a letter dated Aug. 29.

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However, Twitter said in its regulatory filing that the new termination was invalid and improper under the terms of the agreement.

Elon Musk’s Twitter account is seen on a smartphone in front of the Twitter logo in this photo illustration taken April 15, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

Musk has also subpoenaed Zatko, mostly seeking information about the way the microblogging site measures its spam account.

Musk decided to end the deal in July, saying the company misled him and regulators about the true number of spam or bot accounts on the microblogging platform.

His legal team said allegations of certain facts, which were known to Twitter before July 8 but not disclosed to them, provide additional and distinct grounds for terminating the deal, according to a regulatory filing by Musk on Tuesday.

The latest incident comes as the two sides head to a five-day trial in the Delaware Court of Chancery set to begin on October 17. Twitter is asking Chancellor Kathaleen McCormick to order Musk to buy it for the agreed-upon $54.20 per share.

Twitter shares were down 2.5% at $39.02 before the bell.

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Reporting by Ankur Banerjee in Bengaluru; Editing by Arun Koyyur

Our standards: Thomson Reuters Trust Principles.

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