Shares of Twitter Inc. sank 5.0% in premarket trading Monday, after Elon Musk disclosed that he reiterated his request for information as he evaluates the number of spam and fake accounts on the social media company’s platform. In a letter to Twitter via Skadden, Arps, Slate, Meagher & Flom LLP, Musk, the Tesla Inc. chief executive who has agreed to buy Twitter for $54.20 a share, said the refusal to provide the information is a “clear material breach” of Twitter’s obligations under the merger deal, and Musk therefore reserves the right to terminate the deal if he chooses. Tesla’s stock rallied 3.5% in premarket trading. “As Twitter’s prospective owner, Mr. Musk is clearly entitled to the requested data to enable him to prepare for transitioning Twitter’s business to his ownership and to facilitate his transaction financing,” the letter stated. “To do both, he must have a complete and accurate understanding of the very core of Twitter’s business model-its active user base.” Musk said Twitter’s refusal to provide the information makes him suspicious, and raises concerns over what he might uncover from the requested information. Twitter’s stock has shed 7.1% year to date through Friday, while the S&P 500 has lost 13.8%.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.