Elon Musk has suggested he may seek to pay a lower price for Twitter as the potential owner of the social media company has raised new concerns about the presence of fake accounts on the platform.
Tesla CEO says cutting his agreed $54.20 per share offer is ‘not out of the question’, days after he suspended the $44 billion ($36 billion) deal after questioning the number of spam accounts on Twitter.
Musk told the All-In Summit in Miami that the current deal hinged on Twitter’s response to his concerns about fake accounts.
“It really depends on a lot of factors here,” he said in comments reported by the Financial Times. “I’m still waiting for some sort of logical explanation for the number of fake or spam accounts on Twitter. And Twitter refuses to tell us. It seems like a weird thing.
Twitter has repeatedly stated in its quarterly results over the years that less than 5% of its users are spam or fake accounts. Using a term that can be cited when companies want to reprice or cancel offers, Musk said it could be a “material misstatement” if it turns out that the fake accounts or bot accounts of Twitter represent well over 5%.
“Like you say, OK, I’m going to agree to buy your house,” he said. “You say the house has less than 5% termites. This is an acceptable number. But if the correct percentage turns out to be 90% termites, that’s not OK.
Lawyers debated whether Musk could walk away from the deal — or seek a new deal at a lower price — focusing on the bot problem. The deal includes a $1 billion severance fee if Musk walks away, though Twitter could also enact a clause that could force Musk to close the deal at $54.20 a share.
Meanwhile, Musk’s relationship with Twitter management hit a new low on Monday after he tweeted a poop emoji at the platform’s chief executive.
Musk was responding to a detailed Twitter thread posted by his Twitter counterpart, Parag Agrawal, explaining the company’s policy on spam accounts. Musk disputed Twitter’s claim that less than 5% of its users are fake or spam accounts and said he would conduct his own audit.
Agrawal said fighting automated spam accounts was a “dynamic” process that required fighting “sophisticated and hard to catch” actors. He added that some accounts that appear to be spam are actually run by real people.
“The difficult challenge is that many of the accounts that appear superficially fake are actually real people. And some of the spam accounts that are actually the most dangerous – and cause the most harm to our users – may seem completely legitimate at first glance. view,” he wrote. He added that estimating Twitter’s fake account numbers could not be done externally because the process required access to sensitive data such as IP addresses and numbers. phone.
Agrawal ended the thread with a link to a corporate blog on spam accounts, while revealing that Twitter discussed how it estimated its spam count with Musk a week ago and that the company was looking forward to “continuing the conversation with him.”
Musk responded with a poo emoji, followed a few minutes later by asking how advertisers on Twitter knew what they were getting for their money.
“So how do advertisers know what they’re getting for their money? This is fundamental to the financial health of Twitter,” he tweeted.
On Saturday, Musk tweeted that Twitter’s legal team had accused him of breaching a nondisclosure agreement by revealing that the sample size for the social media platform’s checks on automated users was 100. Last month, Musk engaged with tweets criticizing Twitter employees, despite the contractor agreeing not to ‘disparage’ the company or its representatives while he strikes the acquisition deal. of the social media platform.
Musk’s behavior, underscored by his comments in Miami, has sparked speculation that he is setting the stage to reprice the deal or walk away from it, which would cost the company $1 billion in severance fees. richest man in the world. Some experts doubt that the multi-billionaire is seriously considering buying the company.
“Honestly, I don’t know if Elon wants to buy Twitter,” said Drew Pascarella, associate professor of finance at Cornell University. “At first I thought he wasn’t serious. Then he teamed up with banks and financiers and came up with a legitimate acquisition plan. Now he’s been called on a timeout for an issue that’s both well-known and unlikely to impact his future plan for the business. If it’s attention he’s looking for, he’s got it. But does he want to own Twitter? Has he ever done it?