Twitter denies Elon Musk's arguments, whistleblower claims breach buyout contract
Yahoo Finance reporter Alexis Keenan details the latest updates from the ongoing lawsuit between Twitter and Tesla CEO Elon Musk.
Video Transcript
- All right, as we join another biggest story of the day, aside from Zazi's, so no speakers. We're gonna talk about Twitter, because Twitter is saying that Elon Musk's latest attempt to terminate his $44 billion deal to buy the company is, quote, "invalid." Our legal reporter Alexis Keenan is here, and, Alexis, this coming ahead of what is a really big day tomorrow, because we have the testimony on Capitol Hill, and we also have the Twitter shareholder vote.
- Right, so all a crescendo on the same day. But what's going to happen tomorrow is important. This is the whistleblower testimony. This is coming from Peter "Mudge" Zatko, the White Hat, they say, hacker, who was supposed to do good things. He was the former chief of security for Twitter, and he's going to talk to the Senate Judiciary Committee about the company's security and privacy practices. He filed a whistleblower complaint, saying that those practices were lacking, that Twitter is not protecting its platform, in accordance with an FTC agreement that it reached in 2011, saying that it would protect user privacy and user data. So this is going to be so closely watched, not only for that reason, but also because of its connection to the Elon Musk and Twitter battle over that $14 billion merger.
So, what Musk is saying is that Zatko's claims here that they show this lack of security also shows that the company was filing misleading statements in its financial disclosures, because it doesn't know, Musk says, about how many bots the company has on its platforms. That's one of the underlying reasons that he's using for trying to get out of that deal. So those comments that Zatko is going to make, we'll have to see how far the senators delve into that line of questioning. But, also, Senators Dick Durbin of Illinois and Chuck Grassley of Iowa, they have both said that these claims are very serious. This is a serious investigation, just on the privacy concerns alone. Twitter, for its part, has said that, as to Musk's claims, that they are invalid, as you said in the intro there, and, also, they have called Zatko's complaint a false narrative, and they've also said it's riddled with inconsistencies and inaccuracies, and lacks important context around all of these matters.
- And it was Elon's team saying that the payment, the $7 million payment to Zatko, was actually a violation of their merger, and that kind of gets at the heart of the argument. But it's still interesting to look at shares, Seana, because they're still 23% below that 54.20. There's been no bet, no arbitrage play that this deal is going to go through. Interesting watching investors steer clear of Twitter.
- Yeah, it is. Down another 1.5% today, 41.56. I don't know, we'll see how the vote goes tomorrow. We'll see how the testimony goes tomorrow. And then, of course, the five days in Delaware next month. In October. All right, Alexis, thanks so much for hopping on set with us.
