Tesla CEO, Elon Musk says his $44 Billion purchase of Twitter Inc. will not move forward until Twitter is able to provide proof regarding the number of fake accounts on the social media platform.
Musk is still skeptical about Twitter’s claim that about less than 5% of Twitter accounts are spambots, stating that the deal to acquire the social media company “cannot move forward” until Twitter proves the accuracy of the number of spam accounts. Musk remarked that he believes that the numbers of these accounts could be more than 20% of the current number of users that are monetized.
Analysts speculate that Elon Musk is taking advantage of the discussion of the numbers of bot accounts as a ploy to negotiate a lower acquisition price as Twitter loses their stock value. Twitter’s shares had fallen by 8.2% on Monday to close at $37.39 before the initial $54.20 share that Elon Musk agreed on purchasing the social media company.
Teslarati has reported that Wedbush’s Dan Ives stated in a note to investor saying that “Our view is while Musk is committed to the deal the massive pressure on Tesla’s stock since the deal a changing stock market/risk environment [over] the last month, and a number of other financing factors has caused Musk to get ‘cold feet’ on the Twitter deal with the bot issue not a new issue and likely more of a scapegoat to push for a lower price,”
While Musk reaffirms that he is still committed to the acquisition of Twitter Inc. after saying his deal with Twitter was “temporarily put on hold,” he planned to do his own analysis of the bot account situation with his team by using a random sample of 100 user accounts. Shortly after, Musk claims that Twitter’s legality team complained that he had violated a non-disclosure agreement by publicly sharing the situation as a key part of his pitch for how’d he improve the service under his ownership.
Due to the damage to Twitter’s shares, Musk could face a $1 billion fee to cancel the acquisition and additional legal action from twitter if he decides to back out on the plan. Likewise, since the deal was announced on April 25, Tesla’s share had fallen over 25% of their initial trading level of $998.02 to $742.93.