Musk confirms abandonment of Twitter takeover, citing accusations from ex-security chief

Musk confirms abandonment of Twitter takeover, citing accusations from ex-chief security

DAY

Elon Musk invoked in a new letter to Twitter the accusations made by the company's former chief security officer, Peiter Zatko, to justify with complementary arguments the abandonment of his takeover plan , originally announced in early July. 

“Allegations relating to certain facts, known to Twitter before or on July 8, 2022, but not disclosed to parties representing Musk before or on that date, have since surfaced and provide additional and separate reasons for terminating the agreement of takeover,” wrote Mike Ringler, one of Mr. Musk’s attorneys, in a letter to Twitter’s chief legal officer dated Monday and made public Tuesday.

Mr. Ringler discusses allegations by Peiter “Mudge” Zatko, the ex-Twitter security chief, who attacked the platform's failing cybersecurity and accused executives of lying about ways implemented to fight fake accounts and spam.

The claims of Mr. Zatko, who presents himself as a whistleblower, were sent to two American regulators as well as to the Ministry of Justice.

The lawyer for the boss of Tesla specifies that these new elements are, according to him, not necessary to justify the breach of the contract, but constitute additional arguments “in the event that the notice of breach of July 8 was deemed invalid, whatever 'be the reason.'

'Immense victory' 

Mr. Musk has also filed a document with the US stock market watchdog, the SEC, advising of additional reasons for abandoning the acquisition.

In early July, Mr. Musk announced that he was breaking the takeover agreement with Twitter's board of directors, accusing the company of not respecting its commitments by not disclosing the exact number of inauthentic accounts and spam.< /p>

This decision led Twitter to sue the billionaire entrepreneur to compel him to honor the terms of the agreement. A trial, which is expected to last 5 days, will begin on October 17 in a specialized court in Delaware.

Mr. Musk's legal team has asked Mr. Zatko to provide documents and testify in the part of this procedure, a request accepted by the lawyers of the former head of Twitter.

According to Dan Ives of Wedbush Securities, the accusations of Mr. Zatko, a few weeks before the trial, are potentially “a huge victory for Musk that could make Twitter's case more complicated.”

For the analyst, this development is likely to push the two parties to negotiate and find a compromise before October 17, which could take form of a takeover of Twitter by Mr. Musk at a renegotiated downward price.