UPDATE
Musk added this tweet at 7:50 a.m.:
Still committed to acquisition
— Elon Musk (@elonmusk) May 13, 2022
ORIGINAL POST
Elon Musk tweeted this morning that he’s put his purchase of Twitter on hold pending an audit of “spam/fake account” on the site.
He tweeted:
“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users.”
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
It appears a filing to the SEC by Twitter prompted the move. From Reuters:
Twitter Inc(TWTR.N)estimated in a filing on Monday that false or spam accounts represented fewer than 5% of its monetizable daily active users during the first quarter.
The social media company had 229 million users who were served advertising in the first quarter. read more
The disclosure came days after Tesla Inc (TSLA.O) Chief Executive Elon Musk, who has inked a deal to buy Twitter for $44 billion, tweeted that one of his priorities would be to remove “spam bots” from the platform.
They theory here is Musk can walk away if the number of these fake accounts is higher than what Twitter is reporting:
Recommended
Elon Musk taking a step that *could* lead to him walking away completely from his Twitter deal here, saying it's "temporarily on hold." 👇
If Musk is looking for a way out, he may point to the proliferation of spam bots. https://t.co/1qMk5eA2Pv
— Parmy Olson (@parmy) May 13, 2022
A quick audit of Musk’s own account shows a significant amount of fake followers, so Musk has reason to challenge Twitter’s assertion:
Dear Elon, regarding your concern about the 5%, I have a hint for you here. https://t.co/nmKNamGhcj pic.twitter.com/SG4k83vrNK
— Nicolas Henin (@N_Henin) May 13, 2022
So, is he having second thoughts?
No shocker Elon is pumping the brakes. https://t.co/rhCGQwSFF2
— Katie S. Phang (@KatiePhang) May 13, 2022
According to this report, his “offer to buy Twitter was not contingent on customary due diligence”:
It is worth noting that Elon Musk’s offer to buy Twitter was not contingent on customary due diligence, says @matt_levine.
But these are the ways the deal could go wrong still ➡️ https://t.co/KRVWEPudBX https://t.co/j2fgy4PxfD
— Bloomberg Opinion (@opinion) May 13, 2022
The market — including Tesla — is down big since Musk made his offer, so there’s a chance this is a negotiating tactic to just get a better price, too:
I too would be looking for any excuse to back out of a $44 billion purchase of a social media company after I realized it was clearly a bad idea that was tanking my other businesses https://t.co/JPQpqxgKsj pic.twitter.com/IUIwtDGhUA
— Paul Tassi (@PaulTassi) May 13, 2022
And, as you might expect, Twitter’s stock price is down on the news:
Twitter 👇 https://t.co/vREQTagDXz pic.twitter.com/dUG3LFxSQU
— Jonathan Ferro (@FerroTV) May 13, 2022
We’ll keep you posted.
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