Elon Musk doubled down on Tuesday 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.
Here are some key facts
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.
Twitter claimed that less than 5% accounts are spam or fake in its filings.
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.
What We Don’t Know
It is not known how many fake or spam accounts Twitter has. Musk didn’t give details about how he got to 20%. Twitter doesn’t open its data troves up for 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.
Here’s What to Watch
Twitter and Tesla share prices. Pre-market trading on Tuesday saw Twitter shares drop by around 2% Pre-market trading Tuesday morning saw a nearly 44% increase in shares of Tesla, Musk’s electric carmaker. There have been significant shifts in value for Tesla following other developments regarding Musk’s Twitter deal.
The Key Background
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.
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