Musk puts $44-B Twitter buy ‘on hold’
DETROIT (AP) – Tesla billionaire Elon Musk has put his plan to buy Twitter on what he called a temporary “hold,” raising fresh doubts about whether he’ll proceed with the $44 billion acquisition.
Musk tweeted early Friday that he wanted to pinpoint the number of spam and fake accounts on the social media platform. He has been vocal about his desire to clean up Twitter’s problem with “spam bots” that mimic real people, and he appeared to question whether Twitter was underreporting them.
But the company has disclosed in regulatory filings that its bot estimates might be low for at least two years, leading some analysts to believe that Musk could be raising the issue as a reason to back out of the purchase.
“Twitter deal temporarily on hold pending details supporting calculation that spam/ fake accounts do indeed represent less than five percent of users,” Musk tweeted Friday morning, indicating he’s skeptical that the number of inauthentic accounts is that low.
On Friday, Musk subsequently tweeted that he’s “still committed to acquisition.” Neither Twitter nor Musk responded Friday to requests for comment. Musk has conducted a long flirtation with Twitter that culminated in an April deal to acquire the social platform.
The problem of fake accounts on Twitter is not a secret.
In its quarterly filing with the US Securities and Exchange Commission, Twitter itself expressed doubts that its count of bot accounts was correct, conceding that the estimate may be low. “In making this determination, we applied significant judgment, so our estimation of false or spam accounts may not accurately represent the actual number of such accounts, and the actual number of false or spam accounts could be higher than we have estimated,” the filing says.
A review of Twitter filings with the SEC shows that the company’s estimate of spam bot accounts and similar language expressing uncertainty about it have been in Twitter’s quarterly and annual reports for at least two years, well before Musk made his offer.
Sara Silver, a professor of business journalism and financial communication at Quinnipiac University, said it appears Musk is using the number of spam accounts as a pretext to pull out of the deal.
“To claim that this is the reason that he’s putting the deal on pause, it’s not credible,” Silver said. “This is not a new issue for him. It’s not just entering his consciousness now.”
Musk’s net worth, estimated by Forbes earlier this week at $240 billion, was $232 billion as of Friday.
Academic researchers in 2017 attempted a census of all of Twitter’s active English-language accounts and estimated that up to 15 percent were bots of some kind. Emilio Ferrara, a professor at the University of Southern California who helped lead the research, said Friday that Twitter has gotten better at detecting and constantly deleting spam accounts – but they are added to the platform all the time.
“It’s really hard to pinpoint the figure overall,” he said. “It’s not possible – unless you are Twitter – to make a comprehensive estimate of the user base.”
Tesla shares may have also benefitted from Twitter bot accounts over the years. A University of Maryland researcher recently concluded that such bots have been used to generate hundreds of thousands of positive tweets about Tesla, potentially buoying its stock in years when it was under pressure.
Neither Tesla nor its supporters have taken responsibility for those bots.