Elon Musk, the CEO of Tesla, says his agreement to acquire Twitter won’t go through until the firm can offer public evidence that fewer than 5% of Twitter accounts are fraudulent or spam. Musk made the remark in a Twitter message to another user on Tuesday morning. He spent most of the previous day exchanging tweets with Twitter CEO Parag Agrawal, who explained his company’s bot-fighting efforts and how it has consistently assessed that fewer than 5% of Twitter accounts are phony.
Musk claimed in a tweet on Tuesday that “While Twitter claims 20% fake/spam accounts, the number might be substantially higher. My offer was predicated on the accuracy of Twitter’s SEC filings.” He added: “Twitter’s CEO openly refused to present evidence of a 5% stake yesterday. Until he does, the agreement cannot go ahead.” Twitter was unavailable for comment. It’s Musk’s latest assault against fake accounts, an issue he’s promised to eradicate on Twitter.
According to a Bloomberg News story, Musk indicated at a Miami technology conference Monday that at least 20% of Twitter’s 229 million accounts are spambots, a figure he said was on the low end of his estimate. The debate over spam accounts began last week when Musk said that the Twitter transaction had been put on hold awaiting confirmation of the company’s estimations that spam accounts made up fewer than 5% of all users.
Musk also hinted at the All In Summit that he might be willing to pay less for Twitter than the $44 billion bid he made last month. According to Bloomberg, who observed a live stream video of the conference shared by a Twitter user, he suggested a credible transaction at a lesser price was not out of the question. Analysts believe Musk’s statements will support rumors that he wants out of the arrangement or wants to acquire the firm for a lower price.
Musk responded to a Tesla news site’s speculation that Musk “may be seeking for a better Twitter offer if $44 billion sounds too costly” in a tweet on Tuesday. In a research note, Wedbush Securities analyst Dan Ives, who covers both Twitter and Tesla, said, “Twitter shares will be under pressure this morning as the likelihood of a merger finally being done is not looking bright presently.”
Musk has a “60 percent Plus probability” of walking away from the transaction and paying the $1 billion breakup fee, according to him. On April 14, Musk made an offer to purchase Twitter for $54.20 per share. Since then, Twitter’s stock has fallen about 8%, closing at $37.39 on Monday. Musk offered part of his Tesla stock to fund the transaction, which has dropped by nearly a third since the announcement.