Elon Musk may have just thrown Twitter to the wolves. The billionaire put his Twitter deal on hold after the company’s estimates suggest spam and fake account make up for less than 5% of Twitter. Musk wants to know the actual percentage of spam accounts on the platform before he goes ahead with the deal.
This pause could result in the revaluation of the entire deal as well. If that happens, it’d mean that Elon might be able to buy Twitter for cheaper. After his Godfather-styled takeover, this could be yet another blow to Twitter. It could possibly have long-term effects on the platform’s credibility.
Reuters reported Twitter’s claims that spam and fake account make up for less than 5% of its total users. This apparently didn’t sit well with Musk, who has now paused the deal to get “supporting calculation” for this claim.
If Twitter can back its filing, the deal should go ahead unaffected. However, if the company’s calculations are off, then Musk could get another big discount on the deal. He could also decline to buy Twitter altogether. Elon is also interested in knowing the real number because getting rid of bots and spam accounts is a key part of his vision for Twitter.
When Musk’s Twitter buyout got accepted, he put forward key pointers, one of which was to eradicate spam and fake accounts. This means Musk has a fair idea that Twitter is riddled with such accounts. However, Twitter’s own claims put this problem to rest, and probably challenge Musk’s view on the spam accounts problems.
As a result, the Musk Twitter deal is now on hold until Twitter can either prove its estimates or accept it was wrong. If it is the latter, then Twitter could say lose the deal with Elon, along with its own credibility.
Update (13 May 2022)
Elon Musk has reiterated that he is “still committed to acquisition.” This is a reassurance against speculations of Musk backing out of the Twitter deal. However, it still remains to be seen if Elon can get a discount out if Twitter can’t prove its claims.