ELON Musk said on Friday that his plan to buy Twitter is “temporarily on hold” as he tries to pinpoint the exact number of spam and fake accounts on the social media platform, another twist amid signs of turmoil over the $44 billion acquisition.
Musk has been vocal about his desire to clean up Twitter’s problem with “spam bots” that mimic real people and appeared to question whether the company was underreporting them. “Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users,” Musk said, indicating he’s skeptical that the number of inauthentic accounts is that low.
It wasn’t clear whether the issue could scuttle the deal. Musk later tweeted that he’s “still committed to acquisition.” Neither Twitter nor Musk responded on Friday to requests for comment.
The problem of fake accounts on Twitter is not a secret. In its quarterly filing with the SEC, even Twitter doubted that its count of bot accounts was correct, conceding that the estimate may be low.
“In making this determination, we applied significant judgement, so our estimation of false or spam accounts may not accurately represent the actual number of such accounts, and the actual number of false or spam accounts could be higher than we have estimated,” the filing says.
A review of Twitter filings with the US Securities and Exchange Commission shows that the estimate of spam bot accounts and similar language expressing doubts about it have been in Twitter’s quarterly and annual reports for at least two years, well before Musk made his offer and it would have been known to him and his advisors. Sara Silver, a professor of business journalism and financial communication at Quinnipiac University, said it appears Musk is using the number of spam accounts as a pretext to back out of the deal as it’s something he’s well aware of. “To claim that this is the reason that he’s putting the deal on pause, it’s not credible,” Silver said. “This is not a new issue for him. It’s not just entering his consciousness now.”
Stock in both Twitter and Tesla swung sharply in opposite directions Friday, with Twitter’s stock falling almost 10% and shares of Tesla.