Elon Musk will not move forward with the Twitter deal unless spam bots are addressed.
Elon Musk said his $44 billion bid for Twitter Inc (TWTR.N) will not go through unless the firm can verify that spambots represent less than 5% of its total users, hours after hinting that he could seek a lesser price for the company.
“My offer was based on Twitter’s SEC filings being accurate. Yesterday, Twitter’s CEO publicly refused to show proof of <5% (spam accounts). This deal cannot move forward until he does,” Musk said in a tweet.
After a few hours, Twitter stated it was committed to completing the purchase “as soon as practical” at the agreed price and terms.
Its stock recovered some of its losses in premarket trade, but it was still down roughly 3% at $36.31, lower than the price the day before Musk revealed his Twitter position, creating worries about whether the billionaire entrepreneur would go through with his $54.20 per share offer.
Musk said he assumed spam accounts represent at least 20% of users, compared to Twitter’s official estimate of 5%, after putting his offer on hold last week seeking details on spam accounts.
He said on Monday at the All-In Summit 2022 conference in Miami.
“You can’t pay the same price for something that is much worse than they claimed,”
“I mean, it is not out of the question,” Musk replied when asked if the sale might be made at a lower price. My fears increase as I ask more inquiries.”
“They claim that they have got this complex methodology that only they can understand… It cannot be some deep mystery that is, like, more complex than the human soul or something like that.”
Responding to Musk’s criticism of the company’s treatment of bogus accounts, Twitter CEO Parag Agrawal tweeted on Monday that internal estimates of spam accounts on the social media network for the previous four quarters were “far under 5%.”
Given the requirement to utilize both public and private information to assess if an account is a spam, Agrawal said Twitter’s estimate, which has been the same since 2013, could not be replicated elsewhere.
Musk responded to Agrawal’s defence of the methodology with a poop emoji.
“So how do advertisers know what they’re getting for their money? This is fundamental to the financial health of Twitter,” he wrote.