The U.S. Securities and Exchange Commission (SEC) recently released a letter to Elon Musk in June, questioning his commitment to the $44 billion Twitter deal.
The letter reveals that SEC wanted Elon Musk to amend his public 13D filing to reflect his intention to suspend or abandon the Twitter deal. It was a response to Musk’s May 17 tweet, where he stated that the $44 billion “deal cannot move forward” until Twitter provided more data on spam and fake accounts. Based on the letter dated June 2, SEC interpreted Musk’s tweet as meaning he would “suspend completion of the acquisition.”
The letter is evidence that SEC has been closely monitoring Musk’s Twitter takeover. According to Reuters, securities lawyers expect SEC to scrutinize Musk’s public statements to determine if he misled the market.
Musk’s lawyers replied to SEC’s letter on June 7, arguing that the tweet did not require an amendment to the public filing because the deal did not change. Around the same time, Musk’s camp sent a letter to Twitter which was included in his 13D securities filing. The letter to Twitter revealed Musk’s belief that Twitter was “actively resisting and thwarting his information rights” by refusing to disclose information about spam and fake accounts.
Elon Musk vs. Twitter News Roundup
Twitter filed a lawsuit against Elon Musk in the Delaware Court of Chancery earlier this week. The social media company aims to force Musk to finalize the $44 billion acquisition.
Last week, Elon Musk submitted a SEC filing announcing the termination of his Twitter takeover. The filing included a letter outlining the reasons for the deal’s termination, which are listed below.
- Information related to Twitter’s process for auditing the inclusion of spam and fake accounts.
- 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.
In its lawsuit filing, Twitter claims that Musk acted in “bad faith” and decided to terminate the deal after the “market started turning.”
“Having mounted a public spectacle to put Twitter in play, and having proposed and then signed a seller-friendly merger agreement, Musk apparently believes that he — unlike every other party subject to Delaware contract law — is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away,” noted Twitter in its complaint.
Read SEC’s June 2 letter below.