to buy or not to buy - this is the dilemma
Elon Musk says Twitter buyout "will not go forward" until 95% of its users are proven to be real
Musk may be trying to cancel or renegotiate deal, but Twitter wants to sell at original price
Elon Musk's purchase of Twitter has taken several surreal twists and turns since the entrepreneur announced on Friday that the deal was on hold pending the social network's proof that less than 5% of its daily users are fake or spam accounts, as it officially states. Musk takes for granted an external analysis that estimates at 20% such accounts.
Early Tuesday morning, Elon Musk sent the poop emoji with eyes to the current CEO of Twitter, Parag Agrawal, when he publicly defended the 5% figure and added that it is not possible to make an external estimate of spam on the social network, as private information is needed.
A couple of hours later, Musk said that his $44 billion buyout offer is based on the figures that Twitter officially publishes with the Securities and Exchange Commission (SEC), and that if these are not accurate, the deal "cannot go forward." Not until the social network's CEO presents evidence in its favor or admits to an external audit.
Early Wednesday, Elon Musk posted a poll on Twitter asking his followers if they believed the 95% human user figure, giving them two options: one with two laughing emoji and one with a robot emoji. One follower responded that the SEC should investigate whether Twitter's claims are real, and Musk agreed with him.
Some analysts believe the spam bots are an excuse and that Elon Musk is actually trying to cancel the buyout or reduce the price of the acquisition. Musk said Friday that his buyout promise still stands, but at a technology conference in Miami he admitted that a deal at a lower price is not out of the question.
Renegotiating the acquisition is complicated. The deal includes a $1 billion breakup fee to be paid by the party that pulls out of the deal. Also a specific performance clause that gives Twitter the right to sue Musk to force him to complete the acquisition, as long as the debt funding the deal remains intact.
When asked in an interview what he intended, Musk insisted, "I'm waiting for a logical explanation about the number of spam accounts, and Twitter refuses to give it to us." Days earlier, Musk had posted that the sample of users Twitter uses to determine the number of fake accounts is 100 users, adding that Twitter's legal team had called him out for violating a confidentiality agreement by disclosing that figure.
In its latest SEC filing, Twitter clarifies that Musk signed the deal without asking for any private information, giving fuel to the hypothesis that the entrepreneur decided to buy the company without a particular plan.
The situation has precipitated an internal reorganization at Twitter, with the departure of several high-level employees, including the head of consumer products, Kayvon Beykpour, and the head of revenue products, Bruce Falck.
Perhaps the most unusual part of the matter is that when Musk made his bid to buy Twitter, he said that shutting down spam bots was one of his priorities. Now he's using those same bots to slow down the deal....