Elon Musk did not have to be asked. Less than a week after the revelation of the document in which Peiter Zatko, former security chief of Twitter, accuses the social network of having concealed vulnerabilities in its protection system, and lying about its fight against fake accounts, the American billionaire invokes these denunciations to justify the abandonment of his takeover project, initially announced in early July.
“Allegations of 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 distinct reasons for terminating the agreement of redemption “, wrote Mike Ringler, one of Elon Musk’s attorneys, in a letter to Twitter’s legal chief dated Monday, August 29 and made public today by the US stock market watchdog, the SEC.
The lawyer evokes here the facts reproached by Peiter Zatko to Twitter. The claims of the latter, who presents himself as a whistleblower, were sent to two American regulators as well as to the Department of Justice last month. An 84-page document that was revealed last week by the Washington Post and CNN.
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 termination notice of July 8 was deemed invalid, for whatever reason”.
Elon Musk has also filed a document with the policeman of the American Stock Exchange, the SEC, to warn him of additional reasons justifying the abandonment of the acquisition.
As a reminder, in early July, Elon Musk announced that he was breaking the takeover agreement with Twitter’s board of directors, accusing the company of not having respected its commitments by not communicating the exact number of inauthentic accounts and spam. . This decision had led Twitter to sue the billionaire entrepreneur to force him to honor the terms of the agreement. A trial, which should last 5 days, will begin on October 17 before a specialized court in Delaware.
No intention to “harm Twitter”
Dan Ives of Wedbush Securities says Peiter Zatko’s charges, weeks away from 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 the form of a takeover of Twitter by Elon Musk at a renegotiated downward price.
Elon Musk’s legal team is well aware of this and has rightly asked Peiter Zatko to provide documents and testify in the context of this procedure. This request was accepted by the lawyers of the former head of Twitter, while specifying that his participation would be ” involuntary “.
Peiter Zatko “did not alert the competent authorities to favor Musk or weaken Twitter”, assured his advice, “but to protect the American public and the shareholders of Twitter”.
Elon Musk and his lawyers demand from Peiter Zatko all the documents and communications in his possession relating to “the impact and effects of fake accounts and spam on Twitter activity”. The period considered is from January 1, 2019 to the date of receipt of the summons. Another request, they claim any document related to the measurement of the number of monetizable daily active users (mDAU), a key indicator of the group’s performance.
In addition, the billionaire wants to obtain the written traces of presentations that Peiter Zatko would have made to management concerning the risks of cyberattacks and flaws in Twitter’s computer system. He also said that he was interested in all documents and communications “relating to Twitter’s attempts to hide its security vulnerabilities from investors, regulators and the public”, as well as any trace of “illegal activity” within society.
So much information that interests the boss of Tesla, who claims to have given up acquiring Twitter because the company lied to him about the proportion of these fake accounts and spam on the social network.