Musk: Doubts about spam accounts could nip Twitter deal in the bud

LONDON — Tesla CEO Elon Musk says his deal to buy Twitter cannot go through unless the company provides public evidence that less than 5% of accounts on the social media platform are fake or spam.

Musk made a comment early Tuesday in response to another user on Twitter. He spent much of the previous day back and forth with Twitter CEO Parag Agrawal, who posted a series of tweets explaining his company’s efforts to fight bots and how it has consistently estimated that less than 5% of Twitter accounts are fake.

In his tweet Tuesday, Musk said that “20% of fake/spam accounts, while four times what Twitter claims, could be much higher. My offer was based on the accuracy of Twitter’s SEC filings.”

He added: “Yesterday, Twitter’s CEO publicly refused to show 5% evidence. This deal cannot go through until he does.”

Twitter declined to comment.

Musk’s latest salvo over inauthentic accounts is an issue he’s said he wants to get rid of on Twitter.

At a technology conference in Miami on Monday, Musk estimated that at least 20% of the 229 million Twitter accounts are spam bots, a percentage he said was at the lower end of his rating.

The battle over spam accounts started last week when Musk tweeted that the Twitter deal was on hold pending confirmation of the company’s estimates that they make up less than 5% of its total user base.


Also, at the All In Summit, Musk gave the strongest hint yet that he would pay less for Twitter than the $44 billion offer he made last month.

Musk’s comments likely bolster analysts’ theories that the billionaire wants to get out of the deal or buy the company at a lower price. His tweet Tuesday came in response to one from a Tesla news site that speculated that Musk “might be looking for a better Twitter deal because $44 billion seems too high.”

“Twitter stocks will be under pressure again this morning as the likelihood of a deal eventually closing doesn’t look good right now,” Wedbush Securities analyst Dan Ives, who covers both Twitter and Tesla, said in a research note. He estimated that there is a “60% + chance” that Musk will eventually walk away from the deal and pay the $1 billion rescission fee.

Musk offered to buy Twitter on April 14 for $54.20 a share. Since then, Twitter shares have fallen. They fell slightly in Tuesday morning trading to $37.28.

Musk pledged some of its Tesla shares to fund the acquisition, which has fallen by about a third since the deal was announced.

In tweets on Monday, Agrawal acknowledged that Twitter is not perfect at catching bots. He writes that the company has estimated less than 5% spam every quarter. “Our estimate is based on multiple human reviews from thousands of accounts randomly and consistently sampled over time,” Agrawal wrote.

He wrote that his estimates for the last four quarters were well below 5%. “The margins of error on our estimates give us confidence in our public statements every quarter.”

Twitter had quoted the estimate of less than 5% in its quarterly filings with the Securities and Exchange Commission for at least the past two years, well before Musk made his offer last month.

But in the submissions, Twitter expressed doubts that the number of bot accounts was correct, admitting that the estimate could be low.

Albert L. Davis

My name is Albert, and I am a full time blogger by passion. I write about things that I am passionate about, and I have been lucky enough to find a career that fits me so well. I love being able to come home from work and spend my day doing what I want to do. I enjoy sharing tips and tricks to help others live a more balanced life, and I am grateful every day for the chance to share my knowledge with people all over the world.

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