Musk puts Twitter buy on hold, casting doubt on $44B deal
Elon Musk said Friday that his plan to buy Twitter is “temporarily on hold,” raising fresh doubts about whether he’ll proceed with the $44 billion acquisition.
Musk tweeted that he wanted to pinpoint the number of spam and fake accounts on the social media platform. Musk has been vocal about his desire to clean up Twitter’s problem with “spam bots” that mimic real people and appeared to question whether the company was underreporting them.
But Twitter 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 deal.
“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users,” Musk tweeted Friday morning, indicating he’s skeptical that the number of inauthentic accounts is that low.
Musk later tweeted that he’s “still committed to acquisition.” Neither Twitter nor Musk responded Friday to requests for comment.
The problem of fake accounts on Twitter is not a secret.
In its quarterly filing with the SEC, Twitter doubted 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 U.S. Securities and Exchange Commission shows that the estimate of spam bot accounts and similar language expressing doubts about it have been in Twitter’s quarterly and annual reports for at least two years, well before Musk made his offer and it would have been known to him and his advisors.
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.”