Elon Musk’s deal to buy Twitter is in jeopardy

Elon Musk’s deal to buy Twitter is in serious jeopardy, according to three people familiar with the matter, because Musk’s camp has concluded that Twitter’s numbers on spam accounts are not verifiable.

Musk’s team has stopped engaging in some funding discussions for the $44 billion deal, including with a party named as a likely backer, one of the people said. The people spoke on condition of anonymity due to the sensitivity of the ongoing discussions.

Talks with investors have cooled in recent weeks as Musk’s camp cast doubt on recent “firehose” data – a trove of data sold to corporate clients – they received from Twitter. Musk’s team’s doubts about the spam numbers indicate they believe they don’t have enough information to assess Twitter’s prospects as a business, the sources said.

Elon Musk is lining up a growing list of investors to take over Twitter

Now that Musk’s team has concluded that Twitter’s numbers on spam accounts are not verifiable, one of the people said, they are expected to take potentially drastic action.

The person said it was likely a change in leadership of Musk’s team would happen soon, although they didn’t say exactly what they thought that change would be.

If Musk pulls out of the deal, it will potentially trigger a massive legal battle.

Twitter accepted a $44 billion takeover bid from Elon Musk on April 25. Why did he want to buy the social media giant? (Video: Hadley Green, Julie Yoon/The Washington Post)

The terms of the deal say Musk must pay $1 billion to break the deal, but legal experts say Twitter could try to force Musk to go through with the purchase if his reason for scuttling him isn’t. based on the core business of the business. When he made his offer in April, Musk waived his right to take a closer look at Twitter’s finances. Twitter spokesperson Trenton Kennedy declined to comment. Musk did not immediately respond to a request for comment.

Conversely, Twitter plans to comply with Musk’s data requests

Musk rocked the social media world earlier this year with his unprecedented bid to take the company private, arguing he would be able to grow Twitter and make it more open and, in his mind, politically neutral. He said he would let former President Donald Trump come back to the service and argued that its content moderation practices violate free speech.

But soon after, questions arose as to whether he would actually follow through. A global tech stock sell-off deeply reduced his personal net worth, which he had leveraged to secure debt pledges he needed to buy Twitter.

At the Financial Times summit on the future of the car on May 10, the Tesla CEO said then-President Donald Trump’s permanent ban on Twitter was “completely stupid.” (Video: Financial Times)

Musk’s enthusiasm for following through on the deal has been in question since at least May, when he said the deal was “on hold” until he could verify whether Twitter’s claim that less than 5% of accounts are bots or spam was correct. He accused Twitter of withholding information, while the company said it was acting in good faith and providing everything the terms of the deal required.

“Twitter hasn’t been cooperative,” said a person familiar with the talks, speaking on condition of anonymity due to the sensitive nature of the talks.

The bot debate on Twitter is not new. The company has long said that about 5% of its accounts are bots or spam, while outside researchers have occasionally said that number could be much higher. Due to the rapidity with which tactics for creating and concealing the nature of fake accounts are changing, it is difficult even for experts to come to a strong conclusion about who is right.

Comments are closed.