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Saturday, May 14, 2022 1:00 am

Musk puts Twitter buy briefly on hold

Cites spam bots as reason; others doubt deal will go through

KELVIN CHAN and TOM KRISHER | Associated Press

Tesla billionaire Elon Musk has put his plan to buy Twitter on what he called a temporary “hold,” raising fresh doubts about whether he'll proceed with the $44 billion acquisition.

Musk tweeted early Friday that he wanted to pinpoint the number of spam and fake accounts on the social media platform.

He has been vocal about his desire to clean up Twitter's problem with “spam bots” that mimic real people, and he appeared to question whether Twitter was underreporting them.

But the company has disclosed in regulatory filings that its bot estimates might be low for at least two years, leading some analysts to believe that Musk could be raising the issue as a reason to back out of the purchase.

“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users,” Musk tweeted Friday morning, indicating he's skeptical that the number of inauthentic accounts is that low.

Later Friday, Musk tweeted that he's “still committed to acquisition.”

Neither Twitter nor Musk responded Friday to requests for comment.

A review of Twitter filings with the SEC shows the company's estimate of spam bot accounts and similar language expressing uncertainty about it have been in Twitter's quarterly and annual reports for at least two years, well before Musk made his offer.

Sara Silver, a professor of business journalism and financial communication at Quinnipiac University, said it appears Musk is using the number of spam accounts as a pretext to pull out of the deal.

“To claim that this is the reason that he's putting the deal on pause, it's not credible,” Silver said. “This is not a new issue for him. It's not just entering his consciousness now.”

Stock in both Twitter and Tesla swung sharply in opposite directions Friday, with Twitter stock falling more than 9% and shares of Tesla, which Musk had proposed using to help fund the Twitter deal, rising about 6%.

Wedbush analyst Dan Ives, who follows both Tesla and Twitter, called Musk's tweet “bizarre” and said Wall Street is skeptical.

“The street view is that he's trying to find an excuse to basically talk down the deal price or walk,” Ives said.

If the deal doesn't go through, Musk could have to pay a $1 billion breakup fee.


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