May 17, 2022 – Tesla CEO Elon Musk has put his $44 billion deal to take Twitter private temporarily on hold as he seeks details in support of a calculation regarding the proportion of fake accounts on the social networking platform.
“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts indeed represent less than 5% of users,” Musk tweeted on Friday, May 13.
Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of usershttps://t.co/Y2t0QMuuyn
— Elon Musk (@elonmusk) May 13, 2022
According to Musk, his team was testing “a random sample of 100 accounts” to identify bots on Twitter.
Any sensible random sampling process is fine. If many people independently get similar results for % of fake/spam/duplicate accounts, that will be telling.
I picked 100 as the sample size number, because that is what Twitter uses to calculate <5% fake/spam/duplicate.
— Elon Musk (@elonmusk) May 14, 2022
Two days later, however, 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.
Twitter legal just called to complain that I violated their NDA by revealing the bot check sample size is 100!
This actually happened.
— Elon Musk (@elonmusk) May 14, 2022
Musk’s announcement regarding putting the deal on hold had sent Twitter’s share price plunging 10 percent in pre-market trading before the stocks picked up again, according to international reports. There are speculations that Musk could be seeking to renegotiate the $44 billion deal or even call it off, but Musk maintains that he is “still committed to the acquisition.”
According to a latest report by Bloomberg. Musk has said that a deal at a lower price is “not out of the question.”
On the other hand, the US Securities and Exchange Commission (SEC) is reportedly investigating Musk for not disclosing his stake in Twitter when he struck the deal to acquire Twitter last month, according to a report by The Wall Street Journal.
The delay in announcing his 9.2 percent stake in Twitter allowed Musk to buy more stock without actually alerting other shareholders of his ownership.
The report, citing people familiar with the matter, states that Musk disclosed his large stake in the company on April 4 – ten days after he was supposed to file a public form that investors, acquiring more than 5 percent of a company’s shares, must submit to the SEC. If Musk had filed the form, other shareholders in Twitter would have been alerted to his interest in taking over the company.
Daniel Taylor, who is an accounting professor at the University of Pennsylvania, told WSJ that by not reporting his sizable stake, Musk likely saved $143 million.
There has been no comment from either SEC or Musk so far. Musk’s bid to take Twitter private is also being reviewed by the Federal Trade Commission (FTC).
On the other hand, civil society organisations and investors are calling on Twitter’s stakeholders and financial institutions, who are backing Musk’s deal, to use their powers to ensure that Twitter “continues to uphold and strengthen its strong focus on battling hate speech, disinformation, and incitement to violence to protect those most at risk across the globe.”
Musk, who has called himself a “free speech absolutist”, has drawn concerns from experts for his “free speech” promises since finalising the massive deal and there has been a hot debate around the future of expression on the platform after its privatisation.
The experts are of the opinion that Musk’s promise to promote free speech and let people say whatever they want will, at the same time, put the onus on them to fight misinformation and bullying. They also believe that after privatisation, the platform is likely to prioritise profits over healthy online conversations and that Musk will have the power to decide what can and cannot be posted on Twitter.
