 Texas Attorney General Ken Paxton | Image: USA Today Elon Musk has threatened to terminate his $44B agreement to buy Twitter, accusing the social media company of material breach. In a letter addressed to Twitter's chief legal officer Vijaya Gadde and disclosed in an SEC filing on Monday, Musk's lawyer Mike Ringler accused the social media company of not complying with Musk's request for data regarding spam and fake accounts on the platform. More: - Ringler claims Musk is entitled to the data so the Tesla CEO can prepare for the transition of Twitter to his ownership and help him secure financing for the deal.
- Ringler adds that for both to happen, Musk needs a complete and accurate understanding of the core of Twitter's business model, which he claims is Twitter's active user base.
- Ringler said Musk is not required to explain his rationale for requesting the data or submit to new conditions Twitter has attempted to impose on Musk's right to request the data.
- Ringler also said Twitter's hesitance to provide the requested data for Musk to conduct his own analysis is raising suspicion of what the data might uncover.
- Ringler noted that Musk will not retain or use any competitively sensitive information if the transaction is not completed.
- He said Twitter's behavior regarding the data release seems like the company is actively resisting and thwarting Musk's information rights under the merger agreement.
- Ringler claims Twitter's behavior is a clear material breach of Twitter's obligations under the merger agreement and Musk has the right not to consummate the transaction.
- Twitter shares were down 4% in Monday morning trading. It closed at $39.56, down 1.4% for the day.
In related news: - On Monday, Texas AG Ken Paxton launched an investigation into Twitter, saying the company might have falsely reported its fake bot accounts in violation of the Texas Deceptive Trade Practices Act.
- Paxton's office has ordered Twitter to produce documents on how it calculates and manages its user data and how that information relates to its advertising business.
- Twitter has until June 27 to respond.
Zoom Out: - On April 25, Twitter and Musk entered an agreement for Musk to take the social media company private at $54.20 a share.
- On May 13, Musk announced he was putting the deal on hold "pending details supporting the calculation that the amount of spam and fake accounts on Twitter is less than 5% of users," which Twitter estimates.
- Under the takeover agreement, Musk would owe Twitter a $1B breakup fee if he terminates the deal.
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 Binance CEO Changpeng Zhao at a conference in 2018. | Image: REUTERS/Darrin Zammit Lupi Binance has processed at least $2.35B worth of transactions stemming from hacks, investment frauds, and illegal drug sales, according to a report by Reuters. Reuters claims Binance kept weak money laundering checks on its users until mid-2021 despite concerns raised by senior company figures since 2018. Binance has about 120 million users globally and processes hundreds of billions of dollars worth of crypto trades a month. More: - In a separate report published in 2020, crypto researcher Chainalysis found that Binance received at least $770M in criminal funds in 2019.
- Data from Crystal Blockchain showed that from 2017 to 2018, Binance was used in transactions worth at least $780M on the world’s largest darknet drugs market, Hydra.
- In April, the U.S. DOJ seized Hydra’s servers and closed the site down.
- Reuters found that Binance was used to launder some of the cryptocurrency stolen from Eterbase by the North Korean hacking group Lazarus in 2020.
- Earlier this year, Binance confirmed that Lazarus transferred some of the stolen funds from its $615M hack of crypto gaming platform Axie Infinity.
- German law enforcement officers claim Binance was used in 2020 to launder some of the funds from investment fraud schemes that cost victims $800M.
- Responding to the claims, a Binance spokesperson said the company did not consider Reuters’ calculation accurate, adding that the company is building the most sophisticated cyber forensics team on the planet.
- Reuters claims Binance, in the last five years, has allowed traders on its platform to buy and sell a digital coin called Monero. Unlike Bitcoin, where trades are recorded on a public blockchain, Monero offers users anonymity.
- A 2020 report by the U.S. DOJ said the use of anonymity-enhanced cryptocurrencies like Monero was often linked to criminal activity.
- Binance offers a Beginner’s Guide to Monero on its website.
- Binance has also funded other privacy coin projects.
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JetBlue has increased its reverse breakup fee to sweeten its Spirit Airlines takeover offer and thwart Spirit’s planned merger with fellow budget airline Frontier. JetBlue raised its reverse breakup fee by $150M to $350M, or $3.20 per Spirit share, in the event that its Spirit takeover falls through due to antitrust concerns. The increase comes days after Frontier offered to pay a $250M breakup fee if its planned merger with Spirit falls through. More: - JetBlue also committed to prepay $164M of the breakup fee, or $1.50 a share, as a cash dividend to Spirit shareholders once its acquisition offer is approved.
- The new provisions bring JetBlue’s total offer for Spirit to $31.50 a share.
- Spirit shareholders are scheduled to vote on Friday on Frontier’s $2.9B offer to combine the two budget airlines.
- Proxy advisory firms are split on the different deals.
- Last week, Institutional Shareholder Services (ISS) recommended that Spirit investors vote against Frontier’s merger offer, claiming Spirit was better off negotiating a deal with JetBlue.
- ISS made the recommendation before Frontier offered a $200M breakup fee.
- Glass Lewis and Co. supported Spirit’s planned merger with Frontier, citing an easier regulatory path for the deal.
- JetBlue has made some divestiture commitments to help win regulatory approval for the Spirit takeover deal.
- JetBlue’s Northeast Alliance partnership with American Airlines has been under the scrutiny of the Justice Department.
- Both advisory firms are expected to provide updates given the recent developments.
- Spirit shares closed up more than 7% on Monday. JetBlue was up 2%, and Frontier was up over 4%.
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Shares of Chinese ride-hailing company Didi Global jumped over 30% on news that Chinese regulators were concluding their yearlong data security probe into the company. According to people familiar with the matter, regulators are preparing to lift the ban on adding new users to Didi’s platform and reinstate its mobile app on domestic app stores. More: - Regulators are also lifting the ban on new users on two other Chinese companies, logistics platform Full Truck Alliance and online recruitment firm Kanzhun.
- Last June, all three companies went public in the U.S.; shortly after, Chinese authorities launched a cybersecurity review into the companies, citing national security concerns.
- Shares of the companies fell sharply following the probe announcement. Last July, they had a combined market cap of $115B compared to the current market cap of $25B.
- Didi shares are down over 80% since it went public.
- Full Truck Alliance is down over 60%, and Kanzhun is down over 30%.
- Last month, Didi shareholders approved the company’s plan to delist from the NYSE to resolve its cybersecurity probe in China.
- The company plans to pursue a listing in Hong Kong.
- Didi shares closed at $2.30, up more than 24% for the day.
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 Apple Car Play | Image: Apple Apple kicked off its annual Worldwide Developers Conference (WWDC) on Monday, sharing its latest software updates across its various product offerings. The tech giant announced updates to several applications, including its Apple Pay, Messages, Maps, Privacy, and Car Play, and announced two new laptops that would run on its new Apple M2 chips. The event was digital-only; however, Apple invited some developers and students to watch the keynote recording at the Apple Park campus in Cupertino, California. More: - Apple announced iOS 16 for the iPhone, macOS Ventura for its Macs, iPadOS16 for iPad, and watchOS9 for the Apple Watch, including sleep tracking features and an updated fitness tracker.
- Apple launched a new feature called Safety Check, which allows users to quickly turn off all services and apps being shared with others like location or if a user’s texts go to other devices.
- The company unveiled its own buy now, pay later product called Apple Pay Later, which allows users to buy items wherever Apple Pay is accepted and pay for it over four payments with zero fees.
- Apple’s messaging app, Messages, also got a few significant updates: users will be able to edit, unsend, and mark messages as unread on the platform.
- Apple announced updates to CarPlay, displaying a full interaction with a car’s entire dashboard display.
- Apple said it is working with companies like Mercedes, Audi, Nissan, and others, and the vehicles that will support the update will be announced late next year.
- Other updates the company announced include changes to iCloud photo sharing and Apple Home.
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U.S. hedge fund Elliott Management is suing the London Metal Exchange (LME) for more than $456M over the company's decision to suspend and cancel nickel trades in March following a surge in the metal's price. On March 8, LME suspended trading after nickel's price jumped above $100,000 a ton, more than double its price in under two days. The price surge was triggered by a short squeeze of China's Xiang Guangda's short position. LME resumed trading on March 16. More: - Elliot claims LME acted unlawfully or exercised its powers unreasonably and irrationally when it decided to suspend and subsequently cancel the trades.
- Elliot's $456M claim is approximately the price of 9,000 tons of nickel sold at $50,000 a ton — the price nickel was reset to after trades were canceled.
- LME said the claims are without merit, and it plans to defend its actions.
- LME has denied that its parent company, Hong Kong Exchanges and Clearing (HKEX), influenced its decision.
- U.K. financial regulators are also reviewing the actions of LME.
- Nickel is currently trading for around $29,000 a ton.
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- Russia has warned U.S. news organizations that they risk being stripped of their accreditation unless the treatment of Russian journalists in the U.S. improves. Moscow said the licenses of some Russian state media operating in the U.S. and other Western countries have been withdrawn.
- U.K. Prime Minister Boris Johnson survived a no-confidence vote on Monday evening. The vote was triggered in part by concern over the PM’s attendance at parties during COVID-19 lockdowns. Under Conservative Party rules, Johnson can’t be challenged for another year. The vote was 211-148.
- Paramount Pictures was sued for copyright infringement over the movie Top Gun. The family of the author whose article inspired the movie is seeking damages, including some profits from the new movie Top Gun: Maverick. Maverick grossed over $500M globally on its opening weekend.
- Amazon shares closed at $124.79, up ~2% on its first day of trading following its 20-to-1 stock split. The e-commerce giant initially announced its plans to split in March. Investors received 19 additional shares for each Amazon share they owned.
- The Biden Administration declared a 24-month tariff exemption for solar panel products from Cambodia, Malaysia, Thailand, and Vietnam. Tariffs on China and Taiwan solar products will remain in place.
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 |  | Vanessa Omeokachie is a Researcher at Inside. Her interests include finance, tech, and startups. In her free time, she enjoys reading, hiking, attending music festivals, and traveling. Connect with her on Twitter @VanessaOmeo or through email at vanessa@inside.com |  | | Editor | Aaron Crutchfield is based in the high desert of California. Over the last two decades, he has spent time writing and editing at various local newspapers and defense contractors in California. When he's not working, he can often be found looking at the latest memes with his kids or working on his 1962 Ford. | |
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