Elon Musk Says $44 Billion Twitter Deal ‘Cannot Move Forward’ Until He Has Clarity On Bot Numbers
“My offer was based on Twitter’s SEC filings being accurate.”
Will he or won’t he?
Elon Musk said his much-debated, $44 billion deal to buy Twitter won’t happen until he has better clarity on how many accounts are fake on the social platform.
Twitter claimed in a recent filing that less than 5% of its monetizable daily active users — known as mDAUs — during the first quarter of 2022 were bots or spam accounts.
But Musk estimates that around 20% of the accounts on Twitter are fake or spam accounts, and said he’s concerned that the number could be even higher than that.
“My offer was based on Twitter’s SEC filings being accurate,” Musk tweeted early Tuesday. “Yesterday, Twitter’s CEO publicly refused to show proof of <5%. This deal cannot move forward until he does.”
Just after Musk expressed his concerns, Twitter announced later Tuesday morning that it is committed to the deal at the pre-agreed price, adding that it has submitted a proxy filing to the SEC.
The company’s shares slipped 2.46% in pre-market trading on Tuesday, reports CNBC.
Musk’s tweet comes just a few hours after Parag Agrawal, Twitter’s CEO, posted a lengthy thread about spam on the social network.
Agrawal, a software engineer, said that Twitter’s spam estimates are based on multiple human reviews of thousands of accounts that are repeatedly sampled at random over time.
He said it’s not possible for external groups to calculate the exact number of spam accounts on the platform because it requires both public and private information that Twitter can’t share.
“Externally, it’s not even possible to know which accounts are counted as mDAUs on any given day,” he said.
Analysts say that the Tesla and SpaceX billionaire may be trying to drive down the price due to the recent market sell-off.
“Elon Musk’s recent comments suggest he is trying to negotiate a lower offer price,” equity analyst Brent Thill and equity associate James Heaney said in a research note.
“We believe that Musk is using his investigation into the % of fake TWTR accounts as an excuse to pay below $54.20/share. In reality, the NASDAQ COMP is down 25% YTD [year-to-date] and Elon Musk realizes that he may be overpaying for the asset.”
Bloomberg reported that Musk suggested he was interested in renegotiating at a recent Miami conference where he explained that a lower price would not be “out of the question.”
Musk initially agreed to pay a 38% premium for the platform in his $44 billion deal.
At the conference Musk cracked, “Currently what I’m being told is that there’s just no way to know the number of bots. It’s like, as unknowable as the human soul.”
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