Elon Musk has accused Twitter of "resisting and thwarting" his inquiries about how many fake, or bot accounts are currently on the Twitter platform. Musk has been trying to get this information since his acquisition process for the platform began.
Musk has reportedly called Twitter's unwillingness to provide the information a "clear material breach" to the terms of the agreement that is still under negotiation. As a result, Musk is reserving his right to not complete the transaction.
In the letter to Twitter Chief Legal Officer Vijaya Gadde, Skadden attorney Mike Ringler for Musk said that "Mr. Musk reserves all rights resulting therefrom, including his right not to consummate the transaction and his right to terminate the merger agreement," according to CNBC.
He said further that Twitter must provide the information that is being requested, and that the merger agreement requires it. Ringler disputed Twitter's claim that they are not responsible to give that data in order to close the deal.
"Mr. Musk is entitled to seek, and Twitter is obligated to provide," Ringler wrote, "information and data for, inter alia, 'any reasonable business purpose related to the consummation of the transaction.'"
"At this point," Ringler continued, "Mr. Musk believes Twitter is transparently refusing to comply with its obligations under the merger agreement, which is causing further suspicion that the company is withholding the requested data due to concern for what Mr. Musk's own analysis of that data will uncover."
The letter, submitted to the SEC, posited that "If Twitter is confident in its publicized spam estimates, Mr. Musk does not understand the company's reluctance to allow Mr. Musk to independently evaluate those estimates. As noted in our previous correspondence, Mr. Musk will of course comply with the restrictions provided under Section 6.4, including by ensuring that anyone reviewing the data is bound by a non-disclosure agreement, and Mr. Musk will not retain or otherwise use any competitively sensitive information if the transaction is not consummated."
Twitter shares were down 5 percent on Monday morning trading.
Musk has been adamant throughout the process that he needs to know how many of the accounts on Twitter are actual humans. There is speculation that if the number is higher than Twitter execs have reported, Musk could negotiate a new buying price that's less than the $44 billion initially offered and agreed to.
Musk and his team have been willing to do the calculations themselves, but Parag Agrawal, current CEO who took over after founder Jack Dorsey left in the fall, said that for Musk to undertake this count he would need access to information that is not currently public.
This is a breaking story and will be updated.