In a nutshell: The ongoing question of whether Elon Musk will buy Twitter could soon be answered as reports surface that the deal is in “grave danger” which is sending the company’s stock price down. The world’s richest man is said to have stopped talks to secure funding from a backer for a $44 billion deal, suggesting he is preparing to leave or renegotiate the price.
Washington Post, citing three people familiar with the matter, writes that Musk’s biggest problem is familiar: fake accounts. Tesla Boss Temporarily Postpones Twitter Deal on hold back in May, until it received confirmation that spam and fake accounts on the site did indeed make up less than 5% of its user base, as stated in the company’s documentation.
The issue came up again last month when Musk said he could leave the deal as Twitter “actively opposes and violates” its rights to information by refusing to provide information about the number of fake, spam and bot accounts on the site. If it would constitute a “substantial breach,” as Musk said, he could stop the acquisition without paying a $1 billion fine.
— Elon Musk (@elonmusk) June 6, 2022
It appears that the Musk camp is still unable to verify the spam account data provided by Twitter and is expected to take drastic action shortly. This is despite Twitter saying yesterday that it has doubled the number of spam accounts it blocks daily, from 500,000 in May to one million. This includes accounts identified and deleted as they are created and never join the platform (therefore not considered daily users).
Another factor cooling Musk’s interest is likely Twitter’s stock price. When he placed his bet in April, he hovered around $45. It’s now around $37, which makes it look like it’s overpaying. However, the lower share price could allow Musk to force Twitter to renegotiate the deal so it can pay less for the company.
Credit: www.techspot.com /