The billionaire initially sent an early tweet saying the $44 billion deal is pending until he receives more information about the proportion of fake accounts on the social media site, which sent Twitter stock tumbling as much as 25% in premarket trading. A few hours later he sent another tweet saying he is “still committed” to the deal. Twitter’s shares recouped some of their losses and closed 9.7% lower in New York.
Musk said he was waiting for details on a recent filing from Twitter that fake accounts on the social media platform contributed less than 5% of its users. In a follow-up tweet late Friday, he added that his team will do a random sample of 100 followers as a way to find out.
Twitter said in its latest quarterly results “that the average of false or spam accounts during the first quarter of 2022 represented fewer than 5% of our monthly daily active users during the quarter.” However, this data-point has been part of Twitter’s quarterly filings for almost a decade. Twitter said it applied “significant judgment” to its latest estimate, and the true number could be higher.
Twitter Chief Executive Officer
“I won’t use the deal as an excuse to avoid making important decisions for the health of the company, nor will any leader at Twitter,” Agrawal said.
Fighting fake accounts has been a cornerstone of Musk’s bid to reform Twitter. In a statement announcing his deal to buy the company last month, he revealed he wanted to defeat spam bots, authenticate all humans, and make its algorithms open source. Musk has also said he’d like to make the platform a bastion of free speech, taking the guardrails off of content moderation.
Bots are currently allowed on Twitter, though under the company’s policy such accounts are supposed to indicate that they’re automated. The platform has even launched a label for “good” bots, such as @tinycarebot, an account that tweets self-care reminders. Spam bots, however, are not permitted, and the company has policies meant to combat them.
Doubts have grown in recent days that Musk would be able to pull off his acquisition of Twitter, and that the entrepreneur may consider dropping his bidding price for the micro-blogging site. The whole transaction has been a frenzied and untraditional affair, largely played out on Twitter. Musk went from being “just” a prolific user to revealing a more than 9% stake in the company and then launching an unsolicited takeover offer -- without detailed financing plans -- within a matter of weeks. It
“There will also be questions raised over whether fake accounts are the real reason behind this delaying tactic,” said
The proposed takeover includes a $1 billion breakup fee for each party, which Musk will have to pay if he ends the deal or fails to deliver the acquisition funding as promised. It is unclear whether an update by Twitter on the number of fake accounts -- if materially larger than 5% -- would trigger a so-called material adverse effect clause, releasing Musk from the breakup fee.
“Musk should have slowed down for a second and not been so rash,” said
The spread on the deal, which offers an indication of how much Wall Street believes the takeover will be completed,
Musk’s latest tweets landed
The changes reflect Twitter’s current state of limbo while it awaits a new owner.
The analysts cited the ongoing meltdown in technology shares, Twitter’s
Employees at Twitter have been on an
Aside from doubts over the extent of spam bots on Twitter’s platform, the world’s richest person is still working to secure the money to actually complete the deal. Musk has
He recently disclosed $7.1 billion in equity commitments from investors including
“Musk has never had the full funding – we know that from his constant attempts to get financial support – but he also held all the cards,” said
(Updates with Musk’s comments in third paragraph)
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