Shares of Twitter dropped by around six percent after hours when news of Musk's intentions broke.
The letter alleges that Twitter breached the terms of the merger agreement by failing to provide accurate data on the number of spam and bot accounts on the platform, an issue Musk has raised repeatedly since offering to buy the company in April. Therefore, the letter continues, Musk plans to exercise his "right to terminate the Merger Agreement and abandon the transaction contemplated thereby."
Twitter board chair Bret Taylor said the company will pursue legal action to prevent Musk from backing out. A trio of corporate law professors told Reuters that Twitter has a strong case. If Musk does get out of the deal, he'll owe Twitter $1 billion under the terms of the agreement.