Elon Musk says the former Twitter security chief’s revelations have given him new reasons to walk away from his $44 billion deal to buy the social media platform.
Musk’s lawyers filed a new “Termination Letter” with the SEC on Aug. 29, citing the testimony of Twitter whistleblower Peiter “Mudge” Zatko as evidence that Twitter misled Musk in the parties’ merger agreement. Specifically, Musk alleges that Twitter’s statement in the merger agreement that it did not mislead the SEC is false, citing Zatko’s allegations. In Zatko’s own complaints, published last week, he alleged that Twitter has repeatedly and knowingly misled regulators about the security of its platform.
“[Zatko’s] allegations, if true, show that Twitter has violated the following provisions of the Merger Agreement, giving the Musk parties the right to terminate the Merger Agreement in accordance with its terms, as more fully described below,” Musk’s new cancellation letter.
Musk, of course, desperately wants to pull out of the deal, but must prove to a judge that Twitter violated some aspect of the merger agreement. If he doesn’t, he’ll have to pay a $1 billion fine or being forced to perform “specific feats” (meaning: actually buying Twitter).
However, it is not clear whether Musk’s new termination letter strengthens his case. Musk’s first termination letter was filed in early July, making similar allegations that Twitter misled the SEC in its legal disclosures (among other claims). This new letter essentially repeats the same charge and adds Zatko’s complaint as additional evidence.
Law professor Ann Lipton, who is? analyzed the credibility of Musk’s lawsuit before walking away from the Twitter deal, previously said Zatko’s complaint would be something of a “wild card” in the lawsuit. However, before this new termination letter came out, she said Musk’s arguments “don’t seem very strong.”
