Refrain from commenting on deal with Musk: Twitter to staff

After Tesla chief executive Elon Musk suspended the $44 billion deal to buy Twitter, the social media giant has asked its employees not to comment on the deal publically. Twitter, in an internal memo to its employees, says that they should refrain from "tweeting, slacking, or sharing any commentary" on the company's deal. The mega-deal fell apart after Musk accused Twitter of failing to provide information on the total number of bot accounts on Twitter.

The Twitter memo says it's an "ongoing legal matter" and that it would continue to share information with employees but it's going to be "very limited". The company said it'll initiate a legal action against Elon Musk to enforce the merger agreement agreed upon during the initial discussion.

In a U.S. S.E.C. (Securities and Exchange Commission) filing on July 8, Musk's legal said he's terminating the deal with Twitter as it is in "material breach of multiple provisions of that agreement". It claimed Twitter made “false and misleading” representations on which Musk relied when entering into the merger deal.

"For nearly two months, Mr. Musk has sought the data and information necessary to “make an independent assessment of the prevalence of fake or spam accounts on Twitter’s platform”," says the filing.

According to Musk, information on bots is crucial to Twitter’s business and financial performance and necessary to seal the deal. "Twitter has failed or refused to provide this information. Sometimes Twitter has ignored Mr. Musk’s requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr. Musk incomplete or unusable information," the filing adds.

After the latest action by Musk, Twitter board chairman Bret Taylor said Twitter is hopeful of closing the deal with Musk. The board of directors of Twitter had granted its unanimous approval to the takeover bid by Musk on June 21. "The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery," he tweets.

Musk has been requesting Twitter to share info on bots and fake accounts since May 9, 2022. Musk had previously threatened to pull out of the deal for the past few days. In June, Musk even warned of abandoning the deal if the microblogging platform refused to provide data and information necessary to facilitate the evaluation of spam and fake accounts. Musk said Twitter is "actively resisting and thwarting" his information rights and its corresponding obligations under the merger agreement. After not getting a clear response, Musk put the acquisition deal to take over Twitter on hold “temporarily” last month.

On bot accounts, Twitter had earlier claimed that such accounts represented less than 5% of its monetisable daily active users during the quarter ended March 2022. Musk, however, said he did not believe the company's lax testing methodologies are adequate so he must conduct his own analysis.

To fulfil the deal, Elon Musk was willing to put up $6.25 billion in equity financing to partially fund his $44 billion Twitter bid. This took the deal's total equity commitment to $33.5 billion. He had also got financing commitments from 18 investors, including crypto exchange Binance, venture capital firm Sequoia Capital, and asset managers Brookfield and Fidelity, for the buyout.