Elon Musk says he may not move forward with $44 bln Twitter offer until CEO Parag Agrawal budges

“Yesterday, Twitter’s CEO publicly refused to show proof of <5%. This deal cannot move forward until he does,” Elon Musk said in a tweet Tuesday.

Elon Musk, Twitter
Elon Musk hints at lowering deal price for Twitter. (File: Reuters)

In a clear sign of the uncertainty of a deal, Elon Musk said that his $44 billion worth offer to buy the “digital town square” Twitter may not move forward. In a tweet Tuesday, Musk said that he cannot move forward with a deal until Twitter shows proof that total fake and spam accounts on its platform are actually less than 5 percent of the total active users. This comes hours after he hinted in a public conference that he may cut the offer price for the deal.

“20% fake/spam accounts, while 4 times what Twitter claims, could be *much* higher. My offer was based on Twitter’s SEC filings being accurate,” the world’s wealthiest person said in a tweet. “Yesterday, Twitter’s CEO publicly refused to show proof of <5%. This deal cannot move forward until he does,” he added. Twitter’s shares fell over 3 per cent in pre-market trading on Tuesday.

‘You can’t pay same price for something much worse than claimed’

Last week, Musk had put the Twitter deal on hold citing the undercounted bot accounts on the social media platform. “In making an offer I was relying on the public statements and filings but if those filings are not accurate, then you can’t pay the same price for something that is much worse than they claimed,” Musk said in a conference in Miami Monday. Asked if the deal will be viable at a different price, Elon Musk said “it is not out of the question”. Musk, in his usual candid self, said currently he is debating the number of fake or bot accounts with Twitter’s chief executive Parag Agrawal.

Agrawal tweeted on Monday about the issue of fake bots and reiterated that it is less than 5 per cent from the last many quarters. Twitter’s CEO also said Twitter dynamically removes such accounts and the count is as much as half a million everyday. He, however, said the fake bots estimation can’t be done externally. 

“Unfortunately, we don’t believe that this specific estimation can be performed externally, given the critical need to use both public and private information (which we can’t share). Externally, it’s not even possible to know which accounts are counted as mDAUs on any given day,” Agrawal said in a tweet Monday. To this Twitter thread, Musk responded with a poop emoji.

Musk says his concern is fake accounts are not 5% but maybe 80 to 90 per cent

At the conference, Musk said external estimates by many firms suggest that at least 20 per cent of mDAUs on Twitter are fake bots. “My concern is it’s not 5% and is maybe 80 to 90 per cent,” Musk said. At the end of the day it (the issues with Twitter) should be fixable, within a reasonable time frame, and without revenue collapsing, he added.

Musk also gave an analogy of his latest joke about buying Coca Cola and adding cocaine back into it. Musk said that tweet, which has around 5 million likes on it, is the most liked tweet by any living human, yet it accounts for only 2 to 2.5 per cent of Twitter’s total DAUs. 

“The reality is that Twitter at this point has a very far left bias. And I would call myself a moderate neither Republican nor a Democrat. In fact I have overwhelmingly voted for Democrats, and have never voted for Republicans,” Musk said. “The point I am trying to make is, this is not a right wing takeover, but probably a moderate wing takeover and an attempt that people of all political beliefs feel they are welcome and express their beliefs without fear of being banned or shadow banned. We obviously need to get rid of the (ro)bot armies that are unduly influencing public opinion,” he added.

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