A letter filed on behalf of Musk and his investment partners at Morgan Stanley says that Musk is seeking to cancel the acquisition due to a 'material breach of multiple provisions' of the original merger agreement. Accordingly:
|'[Twitter] appears to have made false and misleading representations upon which Mr. Musk relied when entering into the Merger Agreement, and is likely to suffer a Company Material Adverse Effect (as that term is defined in the Merger Agreement)."|
|"While Section 6.4 of the Merger Agreement requires Twitter to provide Mr. Musk and his advisors all data and information that Mr. Musk requests "for any reasonable business purpose related to the consummation of the transaction," Twitter has not complied with its contractual obligations."|
|"Sometimes Twitter has ignored Mr. Musk's requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr. Musk incomplete or unusable information."|
- Information related to Twitter's process for auditing the inclusion of spam and fake accounts in mDAU
- Information related to Twitter's process for identifying and suspending spam and fake accounts
- Daily measures of mDAU for the past eight (8) quarters
- Board materials related to Twitter's mDAU calculations
- Materials related to Twitter's financial condition
Because Twitter has failed to comply with these requests within a reasonable time period, that, Musk's team says, is a violation of the deal's terms, and is therefore reason enough to cancel the agreement.
Now obviously there will be a standoff between Elon and Twitter, which will force the latter to provide a detailed explanation of such to the SEC.