The richest man in the world, Elon Musk said he is putting his $44 billion takeover of Twitter “temporarily on hold,” as he wants more details about how many of the site’s accounts are bogus or spam.
The Tesla and SpaceX founder said he needs to make sure the fake accounts “do indeed represent less than 5%” of Twitter users, which is what the social media company estimated. Musk made the announcement in a tweet early this morning while sharing a recent Reuters story about the takeover. He later added a reply saying, “Still committed to acquisition.”
The Reuters article cited a federal filing that Twitter made shortly after the company reached a deal with Musk, stating that of the 229 million Twitter users who saw advertising during the time on the site in the first quarter of 2022, less than 5% were fake accounts. That figure comes from Twitter’s first-quarter earnings report, which the San Francisco-based company released days after reaching an agreement with Musk.
The fake Twitter accounts question is because of how the company tracks the number of “monetizable daily active users” – essentially, that accounts it shows ads to when organizations or people use the site on any given day. The company also works to detect and suspend false or spam accounts, while omitting them from its calculations of monetizable active users. However, Twitter acknowledged in its filing that fake or spam accounts still exist on its platform, saying, “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.”
In its earnings report, Twitter said it earned $1.2 billion in revenue, including $1.11 billion in ad revenue – a sharp rise when compared to the same period in 2021. Its costs and expenses still rose though, at a sharper rate of $1.33 billion – which resulted in an operating loss of $128 million. The deal between Twitter and Musk was announced on April 25, Musk said he would take the company private by paying $54.20 per share in cash, after a whirlwind courtship between the billionaire and the social media platform.
When Twitter announced its purchase, it didn’t give a precise deadline for closing the deal, except that it expects the transaction to be completed sometime this year. In his Friday update, Elon Musk didn’t provide any additional details about putting the deal on hold, he instead left it open for interpretation as to how he might postpone or delay the massive purchase.
The seriousness of this whole situation is debatable, as Elon Musk often uses his account to air spontaneous thoughts alongside his concrete plans. For example, before he tweeted about buying Twitter, Musk’s previous message was, “Stop the war on straws!”
Earlier this week, Musk said that once he completes the deal, he would reverse Twitter’s permanent ban on former President Donald Trump, calling the ban, “a morally bad decision, to be clear, and foolish in the extreme.