May 19, 2022 – Tesla CEO Elon Musk has warned that his $44 billion deal to acquire Twitter and take it private cannot move forward unless the company proves its claim that less than 5 percent of its daily users are spam or fake accounts.
Last week, Musk announced that his deal to buy Twitter had been temporarily put on hold while he was seeking details in support of a calculation regarding the proportion of fake accounts on the social networking platform. According to Musk, his team was testing “a random sample of 100 accounts” to identify bots on Twitter.
Two days later, Musk followed up with another tweet saying that he had yet to see “any” analysis that confirmed that fake accounts on Twitter were less than 5 percent. Musk also posted that Twitter’s legal team complained to him that he had violated a non-disclosure agreement by revealing the sample size.
In response to Musk’s concerns, Twitter CEO Parag Agrawal defended the company’s claims that fake or bot accounts make up only 5 percent of Twitter users. But Musk maintained that Twitter was underestimating the count and said that spam accounts on the tweeting platform might be four times the firm’s claims.
Subsequently, reports emerged that Musk was seeking to renegotiate the $44 billion deal and analysts speculated that he might even be considering dropping the takeover. Musk, however, held that he was “still committed to the acquisition” but did not rule out the possibility of a deal at a lower price.
But with Agrawal defending Twitter’s spam accounts figure, Musk says that the deal cannot move forward until the claims are backed up.
20% fake/spam accounts, while 4 times what Twitter claims, could be *much* higher.
My offer was based on Twitter’s SEC filings being accurate.
Yesterday, Twitter’s CEO publicly refused to show proof of <5%.
This deal cannot move forward until he does.
— Elon Musk (@elonmusk) May 17, 2022
Musk’s announcement regarding putting the deal on hold last week had sent Twitter’s share price plunging 10 percent in pre-market trading before the stocks picked up again, according to reports.
On the other hand, the US Securities and Exchange Commission (SEC) is investigating Musk for not disclosing his stake in Twitter when he struck the deal to acquire the platform last month, according to a report by The Wall Street Journal.
The delay in announcing his 9.2 percent stake in Twitter is said to have allowed Musk to buy more stock without actually alerting other shareholders of his ownership.
