In the bitter fight over the disputed acquisition of Twitter Inc., a whistleblower report has Wall Street re-evaluating the odds of a legal settlement.
The report granted Twitter's reluctant buyer Elon Musk with an insider account alleging inaccurate information about fake accounts on the social media company's core platform. In his quest to terminate the deal, Musk has repeatedly sought vast amounts of data and documentation to verify the company's estimates of fake accounts. While early court rulings limited the scope of what Musk could obtain, the whistleblower complaint filed by famed hacker and former Twitter security lead Peiter "Mudge" Zatko claimed Twitter lied to Musk about the size of its fake account problem.
The allegations do not guarantee Musk a legal victory as he tries to get out of his deal to buy Twitter for $44 billion, but the report damages Twitter's case, analysts said.
"Twitter looked to have a easy potential win in the eyes of [Wall Street] heading into the Delaware court battle in [October]," wrote Daniel Ives, senior equity analyst and managing director at Wedbush Securities, in an Aug. 24 tweet. "The Zatko story clearly adds complexity and another wild card to this battle between Musk vs. Twitter."
In an Aug. 23 memo to employees, Twitter CEO Parag Agrawal said Zatko was fired for "ineffective leadership and poor performance" and that the whistleblower's claims were "riddled with inconsistencies and inaccuracies." Twitter did not respond to a...
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