Elon Musk has suggested he might look to pay a lower price for Twitter, as the social media company’s potential owner raised more concerns about the presence of fake accounts on the platform.
Tesla’s CEO said lowering his agreed offer of $54.20 a share would not be “out of the question,” days after putting the $44 billion ($36 billion) deal “on hold” after consulting the amount of spam accounts on Twitter.
Musk told the All-In Summit in Miami that the deal was contingent on Twitter’s response to his concerns about the fake accounts.
“It really depends on a lot of factors here,” he said in comments reported by the Financial Times. “I’m still waiting for some sort of logical explanation for the number of fake or spam accounts on Twitter. And Twitter refuses to tell us. This seems kind of weird.”
Twitter has repeatedly stated in its quarterly results over the years that less than 5% of its users are spam or fake accounts. Using a term that can be cited when companies want to change the price or scrap deals, Musk said it could be a “material adverse misstatement” if it emerges that fake or Twitter bot accounts amount to much more than 5%.
“Like you’re saying, okay, I’ll agree to buy your house,” he said. “You say the house has less than 5% termites. That is an acceptable number. But if it turns out that the correct percentage is 90% termites, that’s not right.”
Lawyers have questioned whether Musk can pull out of the deal, or pursue a new deal at a lower price, focusing on the bot problem. The deal agreement includes a $1 billion breakup fee if Musk pulls out, though Twitter may also enact a clause that could force Musk to complete the deal at $54.20 per share.
Shares of Twitter closed down just over 8% on Monday at $37.39, below where shares were just before Musk revealed he was Twitter’s largest shareholder.
Meanwhile, Musk’s relationship with Twitter management hit a new low on Monday after he tweeted a poop emoji to the platform’s CEO.
Musk was responding to a detailed Twitter thread posted by his Twitter counterpart, Parag Agrawal, explaining the company’s policy on spam accounts. Musk has disputed Twitter’s claim that less than 5% of its users are fake or spam accounts and has said he will conduct his own audit.
Agrawal explained that tackling automated spam accounts was a “dynamic” process that required fighting “sophisticated and hard-to-catch” actors. He added that some accounts that appear to be spam are actually run by real people.
“The difficult challenge is that many accounts that appear fake on the surface are actually real people. And some of the spam accounts that are actually the most dangerous, and cause the most harm to our users, may appear totally legitimate on the surface,” he wrote. He added that the estimation of fake Twitter account numbers could not be done externally because the process required access to sensitive data such as IP addresses and phone numbers.
Agrawal ended the thread with a link to a company blog post about spam accounts, while also revealing that Twitter had discussed how it estimated its spam number with Musk a week ago and that the company hoped to “continue the conversation with him.”
Musk responded with a poop emoji, and minutes later asked how advertisers on Twitter knew what they were getting for their money.
“So how do advertisers know what they are getting for their money? This is critical to the financial health of Twitter,” she tweeted.
On Saturday, Musk tweeted that Twitter’s legal team had accused him of violating a confidentiality agreement by revealing that the sample size for the social media platform’s checks on automated users was 100. Last month, Musk resigned. engaged with tweets criticizing Twitter employees, despite the businessman agreeing not to “disparage” the company or its representatives while completing the deal to acquire the social media platform.
Musk’s behavior, underscored by his comments in Miami, has sparked speculation that he is laying the groundwork to change the price of the deal or abandon it, which would cost the world’s richest man a $1 billion fine. . Some experts doubt that the billionaire is serious about buying the company.
“Honestly, I don’t know if Elon wants to buy Twitter,” said Drew Pascarella, senior professor of finance at Cornell University. “At first, I thought he wasn’t serious. He then teamed up with banks and financiers and devised a legitimate takeover plan. He has now called time out for a problem that is well known and should have nothing to do with his future plan for the company. If it’s attention he’s looking for, he’s got it. But does he want to own Twitter? Ever?
Associated Press contributed to this report