Abandonment of the takeover of Twitter. Elon Musk cites accusations from ex-security chief

Elon Musk invoked in a new letter to Twitter the accusations made by the company’s former security chief, Peiter Zatko. One way to justify once again the abandonment of its takeover project, initially 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 distinct reasons for terminating the agreement of redemption “wrote Mike Ringler, one of Elon Musk’s lawyers, in a letter addressed to the legal manager of Twitter dated Monday and made public this Tuesday, August 30, 2022.

The quality of cybersecurity in question

Mike Ringler talks about the allegations made by Peiter “Mudge” Zatko, the ex-Twitter security chief, who attacked the platform’s failing cybersecurity and accused the leaders of having lied about the means put in place implemented to fight against fake accounts and spam.

The claims of Peiter Zatko, who presents himself as a whistleblower, were sent to two American regulators as well as to the Department 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 termination of July 8 is deemed invalid, for whatever reason”.

“Huge victory”

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.

At the beginning of 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.

Mr. Musk’s legal team has asked Peiter Zatko to provide documents and testify in these proceedings, a request accepted by the former Twitter official’s lawyers.

Dan Ives of Wedbush Securities says Peiter Zatko’s charges, weeks away from trial, are potentially “a huge victory for Musk that could make the Twitter 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.

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