Elon Musk threatened Monday to terminate his $44 billion plan to buy Twitter, accusing management of failing to comply with his request for data on the number of users and fake accounts on the social media platform. Twitter stock dropped.
In a letter accessed by the Wall Street Journal, Musk said Twitter has refused to provide data he seeks, which includes the number of fake accounts, bots and spam.
Twitter stock, which sank more than 5% earlier in the day, fell 1.5% to close at 39.56 on the stock market today.
The letter, from one of Musk's lawyers, said the failure of Twitter to hand over the data was a "clear material breach" of the terms of their agreement. Musk reserves the right not to complete the deal, the letter said.
Twitter Stock: Complications In Getting Data
Twitter remains obligated to provide information and data for "any reasonable business purpose related to the consummation of the transaction," according to Musk's letter.
But getting the data could become difficult. Musk waived detailed due diligence that buyers typically perform on targets.
Musk watchers say he may be overextending himself with his plans to buy Twitter. A number of incidents have called Musk's behavior into question, including last week's report that he wants to cut Tesla's workforce because he has a "super bad feeling" about the economy. Tesla stock plunged more than 9% on the news.
Last week, the Twitter board unanimously recommended that shareholders accept Musk's offer of $54.20 a share for TWTR stock. However, the ultimate outcome remains unclear.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
