Elon Musk could walk away from the negotiations table over acquiring Twitter if the big tech firm continues dismissing his demands to be more explicit about the number of fake and spam accounts on the platform, the billionaire's legal team announced on Monday, causing Twitter shares to dip by 5%.

"Mr. Musk reserves all rights resulting therefrom, including his right not to consummate the transaction and his right to terminate the merger agreement," attorney Mike Ringler said in a filing with the US Securities and Exchange Commission that attached his client's latest demand letter to the social media company.

Tesla CEO's legal team argued that the Twitter board, failing to provide him with more detailed information on fake and spam accounts, constituted a breach of the agreement between Musk and other investors to take over the big tech firm, whose shares are now listed on the New York Stock Exchange at $54.20.

Following investors' reaction to Musk's latest actions regarding the company, Twitter's shares plummeted by $2.12, or 5.3%, to $38.04.

Twitter CEO Parag Agrawal said research showed that "well under 5%" of his platform's users over the last four quarters have been spam or fake accounts as Musk contends that the number is much greater.

The billionaire seeking to acquire the platform claims that the number he was provided was false, refusing to accept it and saying that his offer to take over Twitter was "temporarily on hold" until the issue is resolved. This position was further bolstered by the filing to the Securities and Exchange Commission, which showed that he was not budging.

"Mr. Musk has made it clear that he does not believe the company's lax testing methodologies are adequate so he must conduct his own analysis," Ringler said in the filing. "The data he has requested is necessary to do so." 

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Twitter, on the other hand, said it would be in breach of confidentiality agreements it has with users if it does hand Musk the information he is requesting.

This could be another bid by Musk to lower the cost of his acquisition of Twitter, as he has been facing mounting accusations that he is trying to strike the firm's price in the stock market so that the takeover would be less hefty on his pockets.

The many Twitter users who side with Musk in his various online quarrels on the platform, as per several analysts, ironically prefer the firm's privilege of anonymity.

The multi-billion-dollar company had come under fire less than two weeks ago over allegations made by federal regulators of misusing users' personal data, paying a fine of $150 million.

In the complaint filed, the Federal Trade Commission and the Department of Justice said that from May 2013 to September 2019, Twitter told users that it was collecting their email addresses and phone numbers for purposes of account security. However, the company failed to reveal it would also use the data to enable companies to send targeted online ads to users.

Musk had reached a deal in April to buy Twitter at $54.20 a share, putting the deal's value at $44 billion. But weeks later, he said the deal could not progress until the platform proves that less than 5% of its users were spam accounts or fake.

The news of the settlement came to fuel Musk's hopes to make the deal less costly, while Twitter officials stated that they planned on moving forward with the deal.

Twitter also underlined that if Musk changed his mind, he would have to pay a $1 billion breakup fee.