Twitter’s legal team says Musk violated NDA as deal drama continues

twitter's legal team
FILE PHOTO: Tesla CEO Elon Musk attends the Tesla Shanghai Gigafactory groundbreaking ceremony in Shanghai, China January 7, 2019. REUTERS/Aly Song

(Reuters) – Elon Musk on Saturday tweeted that Twitter’s legal team accused him of violating a nondisclosure agreement by revealing that the sample size for the social media platform’s checks on automated users was 100.

“Twitter legal just called to complain that I violated their NDA by revealing the bot check sample size is 100!” tweeted Musk, chief executive of electric car maker Tesla Inc.

Musk on Friday tweeted that his $44-billion cash deal to take the company private was “temporarily on hold” while he awaited data on the proportion of its fake accounts.

He said his team would test “a random sample of 100 followers” on Twitter to identify the bots. His response to a question prompted Twitter’s accusation.

When a user asked Musk to “elaborate on process of filtering bot accounts,” he replied: “I picked 100 as the sample size number, because that is what Twitter uses to calculate <5% fake/spam/duplicate.”

Musk tweeted during the early hours of Sunday that he is yet to see “any” analysis that shows that the social media company has fake accounts less than 5%.

He later said that “There is some chance it might be over 90% of daily active users.”

Musk tweeted he had “relied upon the accuracy of Twitter’s public filings” in reply to a follower who asked why he had not thought of this before offering to buy the company.

Under the terms of Musk’s contract with Twitter, he is entitled to ask the company for information on its operations following the signing of the deal.

But this is meant to help him prepare for his ownership of Twitter, not to carry out due diligence and reopen negotiations.

Twitter is planning no immediate action against Musk as a result of Musk’s announcement that he was putting the deal on hold, people familiar with the matter said.

The company considered the comment disparaging and a violation of the terms of their deal contract, but was encouraged by Musk subsequently tweeting he was committing to the acquisition, the sources added.

Musk came to Twitter’s office for a meeting on May 6 as part of the transaction planning process, a Twitter spokesperson said.

Twitter CEO Parag Agrawal also weighed in, tweeting “While I expect the deal to close, we need to be prepared for all scenarios.” On Thursday, Agrawal announced leadership changes and a hiring freeze.

(Reporting by Jaiveer Singh Shekhawat and Rachna Dhanrajani in Bengaluru; Additonal reporting by Nivedita Balu and Shivani Tanna in Bengaluru, Ken Li in New York and Katie Paul in San Francisco; Writing by Anna Driver and Editing by Alexander Smith, Nick Zieminski, Alistair Bell and Himani Sarkar; Editing by Cynthia Osterman, Richard Chang and David Evans)

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