Elon Musk doubled down Tuesday and said his $44 billion bid to buy Twitter “cannot move forward” until the company proves that fewer than 5% of accounts on the platform are fake, the latest road bump in a series of difficulties for one of the tech world’s most hotly followed acquisitions.
Musk said his offer to buy the social media company was “based on Twitter’s SEC filings being accurate” and the company needs to provide more information on the number of fake accounts on the platform.
In its filings, Twitter claims fewer than 5% of accounts on the platform are fake or spam accounts.
Musk disputes this figure and estimates spam and fake accounts make up 20% of accounts on the platform, four times higher than Twitter’s official number.
The real number could be “much” higher than that, Musk added.
Musk said Twitter CEO Parag Agrawal “publicly refused to show proof” of Twitter’s claim on Monday, possibly referring to a Twitter thread where the executive rejected Musk’s proposed method to evaluate the number of spam accounts on the platform as flawed.
The “deal cannot move forward until he does,” Musk added.
Twitter on Tuesday said it is committed to seeing the deal with Musk through at the agreed price and terms, Reuters reported. The deal is subject to approval from Twitter shareholders and expected to close this year, the company told Reuters.
What We Don’t Know
The true number of fake and spam accounts on Twitter. Musk did not provide details on how he reached 20% and Twitter does not open its data troves for public inspection. Musk has said his team is evaluating a random sampling of accounts following Twitter’s official account, though the approach is statistically questionable and the precise methodology employed to determine whether an account is fake is still not clear.
What To Watch For
Share prices for Twitter and Tesla. Twitter shares dropped around 2% in pre-market trading early Tuesday. Shares for Tesla, the electric carmaker Musk co-founded and leads, jumped nearly 4% in pre-market trading on Tuesday morning. There have been significant shifts in value for Tesla following other developments regarding Musk’s Twitter deal.
Musk, the world’s wealthiest person, put the deal “on hold” last week in order to get more information on the number of fake and spam accounts on Twitter, an issue he said will be one of his “top” priorities leading the company. While Twitter has made mathematical errors regarding its user base in the past—the company has previously miscounted the number of daily users it had for three years running—and Musk says he is still committed to seeing the deal through, the setback has fueled speculation the billionaire might be trying to secure a better deal or have an excuse to walk away, though he faces a termination fee of $1 billion if he does.