Elon Musk’s New Letter To Cancel Twitter Deal Following Whistleblower Allegations

Following the world’s richest man’s subpoena of a whistleblower seeking documents on how the social media company measures spam accounts, Elon Musk sent a second letter of deal termination to Twitter Inc.

According to Mr. Musk, the company misled him and regulators about the actual number of spam or bot accounts on the microblogging platform when it made a $44 billion offer for Twitter in July.

In a court document filed on Monday, it is stated that Mr. Musk has asked Peiter Zatko, a whistleblower and former head of Twitter security, for information primarily regarding how the microblogging site measures spam accounts.

Famous hacker “Mudge” Mr. Zatko claimed in his complaint, which was made public last week, that the company misrepresented its security measures and gave user growth priority over reducing spam.

Following the revelation, Mr. Musk’s legal team claimed that allegations based on specific facts that were previously unknown to them but were known to Twitter before July 8 have emerged, offering additional and distinct grounds to terminate the agreement.

The summons to Mr. Zatko was issued in advance of a five-day trial that will start on October 17 at the Delaware Court of Chancery.

Twitter is requesting that Chancellor Kathaleen McCormick order Mr. Musk to purchase the stock at the agreed-upon price of $54.20 per share even though he wants to cancel the deal.

According to a regulatory filing made by Mr. Musk on Tuesday, a second termination notice, dated August 29, was also given in case the one from July 8 was found to be invalid for any reason.

Before the bell, Twitter shares were down 2.5% at $39.02.