Musk: Twitter Deal ‚Cannot Move Forward‘ Without Fake Account Data
Musk claims Twitter is massively undercounting how many spam/fake accounts are on the social media platform and suggests he may try to pay less for the company.
I’ve been with PCMag since October 2017, covering a wide range of topics, including consumer electronics, cybersecurity, social media, networking, and gaming. Prior to working at PCMag, I was a foreign correspondent in Beijing for over five years, covering the tech scene in Asia.
(Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Image)
Elon Musk says he won’t buy Twitter until the company can prove than less than 5% of its daily active users are spam or fake accounts.
Hours earlier, Twitter CEO Parag Agrawal published a thread explaining why his company estimates that the number of fake and spam accounts on the platform has, historically, been less than 5%. However, the thread was met with trolling and pushback from Musk, who claims Twitter has been massively undercounting its fake account problem.
“It seems beyond reasonable for Twitter to claim that the number of real unique humans that you see making comments on a daily basis on Twitter is above 95%,” Musk told (Opens in a new window) the All-In Summit conference on Monday. “Does anyone have that experience?”
Musk claimed the true number of spam and fake accounts may be actually “four or five times” higher than Twitter’s own calculations. “The lowest estimate would be 20%,” he said, citing unnamed outside firms that have researched Twitter’s user base.
“Something doesn’t add up here,” he added. “And my concern is not that it is 5%, 7% or 8%, but is it potentially 80% or 90% of bots.”
Musk then went on to say it’s “not out of the question” he’ll try to buy Twitter at a lower price; last month, he agreed to acquire the social media company for $44 billion.
“In https://jiji.ng/ making the Twitter offer, I was obviously reliant upon the truth and accuracy of their public filings. And if those filings are not accurate, you can’t pay the same price for something that is much worse than they claimed,” he said.
However, Tuesday’s tweet from Musk is also setting off more speculation he may try to back out of the deal. Last Friday, Musk put his offer to buy Twitter on hold over concerns the company has been miscounting the numbers of spam and fake accounts on the platform. At the same time, the stock value for Tesla, where he serves as CEO, fell from over $1,000 to about $750. Musk plans on using his own funds and loans borrowed against his investments to buy Twitter.
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As Reuters notes (Opens in a new window) , Musk wavied due diligence on the deal when he agreed to acquire it. He’ll also be subject to a billion-dollar breakup fee if he backs out.
Twitter did not immediately respond to a request for comment. But on Monday, its CEO said the company conducts human-led reviews on thousands of accounts at random to determine the ratio of fake and spam users on the platform. This involves looking at both public and private data about the user account, including IP address, phone number, geo-location information "client/browser signatures, what the account does when it’s active," Agrawal said.
Twitter’s CEO added that the company usually "locks millions of accounts each week" for being suspected spam. "The hard challenge is that many accounts which look fake superficially—are actually real people. And some of the spam accounts which are actually the most dangerous—and cause the most harm to our users—can look totally legitimate on the surface," he said.
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Elon Musk: I Can Legally Cancel Twitter Deal Unless I Get Fake Account Data
In a new SEC filing, Musk claims he has the right to terminate his deal to buy Twitter if the company refuses to hand over more data about how it counts bot and spam accounts.
I’ve been with PCMag since October 2017, covering a wide range of topics, including consumer electronics, cybersecurity, social media, networking, and gaming. Prior to working at PCMag, I was a foreign correspondent in Beijing for over five years, covering the tech scene in Asia.
(Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images)
Elon Musk now claims he has the right to terminate his deal to buy Twitter for $44 billion due to the company refusing to hand over more data on how it count bots and fake accounts.
Musk’s lawyers made the assertion in a Monday SEC filing (Opens in a new window) that alleges Twitter has been “actively resisting and thwarting his information rights” by withholding the data.
“This is a clear material breach of Twitter’s obligations under the merger agreement and Mr. Musk reserves all rights resulting therefrom, including his right not to consummate the transaction and his right to terminate the merger agreement,” his lawyers write.
According to the SEC filing, Musk has been trying to obtain the data from Twitter since May 9— about two weeks after he announced plans to buy the company—so that he can “conduct his own analysis” on the number of bots and fake accounts circulating over the social media platform. However, Twitter has refused to hand over all the data, the filing alleges.
Twitter did not immediately respond to a request for comment. But the SEC filing notes the company has been willing to supply some details on how it counts bots/fake accounts, but not entirely to Musk’s liking.
“Twitter’s latest offer to simply provide additional details regarding the company’s own testing methodologies, whether through written materials or verbal explanations, is tantamount to refusing Mr. Musk’s data requests,” Musk’s lawyers say. “Twitter’s effort to characterize it otherwise is merely an attempt to obfuscate and confuse the issue.”
The SEC filing may signal Musk is preparing to bail on the deal. Last month, Musk said he’d stop the acquisition over concerns Twitter has been massively undercounting its spam and bot problem, which the company claims represents less than 5% of its active user base. Musk, on the other hand, contends the actual number is closer to 20% or possibly far higher.
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The problem for Musk is that canceling the deal could subject him to a billion-dollar breakup fee if he walks under certain conditions, according to the agreement (Opens in a new window) he made with Twitter. The company could also sue Musk and ask a US court to force him to buy the social media platform at the agreed-upon price, citing Musk’s agreement to the contract.
However, the SEC filing from Musk’s lawyers tries to create a legal way for the Tesla CEO to walk from the deal, without suffering any consequences. “As Twitter’s prospective owner, Mr. Musk is clearly entitled to the requested data to enable him to prepare for transitioning Twitter’s business to his ownership and to facilitate his transaction financing,” the filing says.
“At this point, Mr. Musk believes Twitter is transparently refusing to comply with its obligations under the merger agreement, which is causing further suspicion that the company is withholding the requested data due to concern for what Mr. Musk’s own analysis of that data will uncover,” the filing adds.
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