Twitter pushes back after Elon Musk files third termination notice for $44B acquisition

FAN Editor

Twitter is pushing back against Elon Musk after the billionaire filed a third termination notice accusing the company of breaching its obligations under his $44 billion acquisition agreement. 

The social media platform called the third termination notice “invalid and wrongful” and said it has “breached none of its representations or obligations under the Agreement,” according to a filing with the Securities and Exchange Commission. 

“As was the case with each of your prior purported terminations, the Musk Parties third purported termination is invalid for the independent reason that Mr. Musk and the other Musk Parties continue to knowingly, intentionally, willfully, and materially breach the Agreement,” Twitter said. “The Agreement is not terminated, the Bank Debt Commitment Letter and the Equity Commitment Letter remain in effect, and Twitter again demands that Mr. Musk and the other Musk Parties comply with their obligations under the Agreement.”

On Friday, Musk’s legal team claimed Twitter did not seek their consent before making severance payments on June 28 to its former security chief Peiter “Mudge” Zatko and his counsel totaling $7.75 million.  

“This severance payment violated Section 6.1(e) and cannot be cured,” Musk’s lawyers wrote in a letter filed with the Securities and Exchange Commission. “Defendants are thus not required to close under Section 7.2(a) and have an additional basis to terminate the Merger Agreement if the Musk Parties’ termination of the Merger Agreement pursuant to the July 8 Termination Notice and the August 29 Termination Notice is determined to be invalid for any reason.”

Ticker Security Last Change Change %
TWTR TWITTER INC. 42.19 +0.34 +0.81%

FMR. DISNEY CEO: TWITTER DEAL NIXED AFTER FINDING ‘SUBSTANTIAL PORTION’ OF FAKE USERS

The latest termination notice comes as Twitter prepares to take Musk to the Delaware Court of Chancery starting on Oct. 17 to force the billionaire to follow through on the original terms of the deal. 

Musk, who has countersued, claims Twitter misrepresented the total number of spam and fake accounts on its platform when it accepted his $54.20-per-share acquisition offer in April.  Twitter maintains spam and fake accounts make up less than 5% of its users.

Elon Musk speaks at an event in Norway, Aug. 29, 2022

Tesla founder Elon Musk attends Offshore Northern Seas 2022 in Stavanger, Norway, Aug. 29, 2022. (NTB/Carina Johansen via REUTERS / Reuters Photos)

Twitter shareholders will vote Tuesday morning at a special meeting on whether to approve Musk’s deal. At the same time, Zatko will testify before the Senate Judiciary Committee.

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Zatko has alleged Twitter has “extreme, egregious deficiencies” related to cybersecurity issues that put the platform’s users and national security at risk and that the company showed “negligence and even complicity” concerning efforts by foreign governments to “infiltrate, control, exploit, surveil and/or censor the company’s platform, staff and operations.”

He also claims Twitter executives are “not incentivized to accurately ‘detect’ or report total spambots on the platform.” Instead, they are allegedly incentivized to boost the company’s monetizable daily active users count with bonuses that can exceed $10 million. In addition, Zatko said Twitter does not have the resources to fully understand the true number of bots on the platform.

Peiter Zatko

Peiter Zatko, who is also known as Mudge poses for a portrait on Monday, August 22, 2022, in Washington, D.C. He has worked for Google and Twitter. (Photo by Matt McClain/The Washington Post via Getty Images / Getty Images)

Twitter fired Zatko in January and called his allegations a “false narrative” about its privacy and data security practices that is “riddled with inconsistencies and inaccuracies” and lacks important context. 

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