The constant noise and uncertainty around Elon Musk’s $44 billion Twitter deal is threatening his financing for the acquisition of the social media platform. Indeed, efforts to secure the financing have been put on hold, according to multiple reports.

                By                    Yaёl Bizouati-Kennedy

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This led to Musk’s lawyers sending a letter to Twitter, filed with the Securities and Exchange Commission (SEC) on June 6, saying “based on Twitter’s behavior to date, and the company’s latest correspondence in particular, Mr. Musk believes the company is actively resisting and thwarting his information rights (and the company’s corresponding obligations) under the merger agreement.”

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The letter continued, “This is a clear material breach of Twitter’s obligations under the merger agreement and Mr. Musk reserves all rights resulting therefrom, including his right not to consummate the transaction and his right to terminate the merger agreement.”

On May 25, Elon Musk increased his equity commitment with an additional $6.25 billion for the $44 billion Twitter deal, according to a May 25 Securities and Exchange Commission (SEC) amended filing. The move, which came amid intense pressure on Tesla’s stock, increased the commitment to $33.5 billion. The filing also noted that Musk was in talks with Jack Dorsey about additional financing.

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Reuters, citing sources, now reports that Musk has been trying to secure $2 billion to $3 billion in preferred equity financing from a group of private equity firms led by Apollo Global Management that would further reduce his cash contribution. However, according to Reuters, “These conversations are now on hold until there is clarity about the future of the acquisition, one of the sources said.”

As for Twitter, the company said in a statement that it “has and will continue to cooperatively share information with Mr. Musk to consummate the transaction in accordance with the terms of the merger agreement,” according to Axios.

“We believe this agreement is in the best interest of all shareholders,” Twitter added. “We intend to close the transaction and enforce the merger agreement at the agreed price and terms.”

Several analysts are viewing Musk’s bots allegation as a way of either backing out of the $44 billion Twitter deal or lowering its price.

On June 6, Wedbush Securities analyst Dan Ives tweeted that Musk’s latest move “speaks to our thesis over past few weeks that spam/bot issue was going to be the ‘material breach’ cited by Musk to try to get out of TWTR deal. $1 billion breakup fee; Twitter Board will fight this clearly. Help remove a major overhang on Tesla; Twitter stock be under pressure.”

Twitter shares were down very slightly in pre-market trading on June 8, and are down 16.3% in the past month.

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