Musk sends fresh letter to scrap Twitter deal after whistleblower claims

Aug 30 (Reuters) – Elon Musk has sent an additional letter terminating the deal to Twitter Inc. (TWTR.N) to include a recent whistleblower complaint from the social media company’s former chief security officer as another reason to cancel the $44 billion deal.

Peiter Zatko, a notorious hacker known as “Mudge”, said in his complaint last week that Twitter prioritized user growth over spam reduction and falsely claimed that he had a solid security plan. Read more

If the allegation is true, then Twitter violated some of the terms of the merger agreement, Musk and his legal team said in a letter dated Aug. 29.

Twitter, however, said in its regulatory filing that the new termination notice was invalid and erroneous under the terms of the agreement.

Musk also subpoenaed Zatko, primarily seeking information on how the microblogging site measures the spam count.

Musk decided to terminate the agreement in July, saying the company had misled him and regulators about the true number of spam or bot accounts on the microblogging platform.

His legal team said the allegations of certain facts, which were known to Twitter prior to July 8 but not disclosed to them, provide additional and separate grounds for terminating the deal, according to a regulatory filing by Musk on Tuesday. .

The latest turn of events comes as both sides head into a five-day trial in the Delaware Court of Chancery due to begin Oct. 17. Twitter is asking Chancellor Kathaleen McCormick to order Musk to buy it at the agreed price of $54.20 per share.

Twitter shares fell 2.5% to $39.02 before the bell.

Reporting by Ankur Banerjee in Bengaluru; Editing by Arun Koyyur

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