JAKARTA - Elon Musk said on Tuesday, May 17 that his $44 billion bid will not go ahead until Twitter Inc shows evidence that spam bots account for less than 5% of its total users. This he did hours after stating that he could seek lower prices for the microblogging company.
"My offer is based on the accuracy of Twitter's SEC filings. Yesterday, Twitter's CEO publicly refused to show evidence of less than 5% (spam accounts). This deal cannot proceed until he does", Musk said in a tweet.
Hours later, Twitter said it was committed to finalizing the deal on agreed prices and terms "as soon as possible."
As a result of Musk's threat, the Twitter stock fell about 3% to $36.31, lower than its price on the day before Musk revealed his Twitter stock last April. This casts doubt on whether the billionaire entrepreneur will continue his bid at $54.20 per share.
After delaying his offer last week pending information about spam accounts, Musk said he expects spam accounts to account for at least 20% of users compared to Twitter's official estimate of just 5%.
20% fake/spam accounts, while 4 times what Twitter claims, could be *much* higher.
My offer was based on Twitter’s SEC filings being accurate.
Yesterday, Twitter’s CEO publicly refused to show proof of <5%.
This deal cannot move forward until he does.
— Elon Musk (@elonmusk) May 17, 2022
"You can't pay the same price for something much worse than they claim", Musk said Monday, May 16 at the All-In Summit 2022 conference in Miami.
Asked if the deal was worth a different price, Musk said, "I mean, it's impossible. The more questions I ask, the more worried I am."
"They claim they have a complicated methodology that only they can understand... It's not a deep mystery that's, like, more complex than the human psyche or anything like that", Musk said.
Twitter CEO Parag Agrawal tweeted on Monday that the social media platform's internal estimates of spam accounts for the last four quarters were "well below 5%." This tweet was in response to Musk's criticism of the company's handling of fake accounts or bots.
"Twitter's estimates, which have remained the same since 2013, cannot be reproduced externally given the need to use public and private information to determine whether an account is a spam", Agrawal said.
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Musk responded to Agrawal's defense of the methodology with a poop emoji. "So how do advertisers know what they're getting for their money? This is fundamental to Twitter's financial health", he wrote.
Musk has also promised changes to Twitter's content moderation practices. He also criticized decisions such as the ban on former US President Donald Trump as being too aggressive while pledging to crack down on "spam bots".
Musk has called for testing random samples of Twitter users to identify bots. He said, "there are likely to be more than 90% daily active users."
He estimates the total number of Twitter users will grow to nearly 600 million by 2025 and 931 million in six years from now.
"Given that Musk believes that at most 80% of Twitter's current 229 million (users) are humans, it is increasingly difficult to believe that the company can achieve its long-term targets", said Jefferies analyst Brent Thill.
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