Elon Musk has suggested that a disagreement over the number of phony accounts on Twitter could jeopardize his $44 billion proposal to buy the social media network.
Mr Musk stated on Twitter that the purchase “cannot proceed forward” unless Twitter proves that less than 5% of accounts are false or spam.
The CEO of Twitter has rebutted suggestions that the figure is inflated.
Analysts have theorized that Mr Musk is attempting to renegotiate the deal’s price or walk away.
Mr Musk stated on Monday that he may seek a cheaper price for Twitter.
In April, he and the board of directors agreed to buy Twitter for $44 billion (£34.5 billion), but last week, Mr Musk claimed the sale was “on hold” while he looked into phony accounts.
Mr Musk tweeted on Tuesday that his bid for the company was based on Twitter’s “accurate” statements to regulators regarding phony accounts.
Mr Musk claimed that Twitter CEO Parag Agrawal had “publicly refused to present proof” that less than 5% of the company’s accounts were bogus, and that the agreement “cannot move forward” until Mr Agrawal provides proof.
The billionaire, who also owns Tesla, estimates that 20 percent or more of the accounts are bogus.
Elon Musk has said that his bid to buy the social network is on hold while the exact number of spambots and accounts using it are investigated.
Twitter’s CEO, Parag Agrawal, has retaliated, and tensions are rising.
When the world’s richest man responds to one of your tweets with only one symbol, the poo emoji, I suppose you know you’ve got his attention.
I’ve given up attempting to read Elon Musk’s mind, but let’s engage in a little guesswork.
Fake accounts are a significant concern for him. Is that an appropriate peg to hang a renegotiation on? His initial $44 billion bid was significantly greater than the company’s current stock price reflects.
He moved quickly and aggressively, possibly even rashly.
He’s already had to sell a piece of stock in one of his other firms, Tesla, to fund it, which has dragged down the value of that company as other investors become concerned.
There is a $1 billion termination charge if any party in the Twitter deal pulls away now.
Although Mr Musk argues that he is asset-rich rather than cash-rich, it may provide him power to successfully trim a few billion off the offer price, as $1 billion is not small change to Twitter and its shareholders.
Mr Musk, on the other hand, may be correct in questioning Twitter’s worth.
If it isn’t bloated with spam, it may have less potential to be made great again, a term that may ring familiar considering that he has previously expressed interest in re-instating former US President Donald Trump.
By the way, Mr. Trump has so far declined the invitation.
On Twitter, Mr Musk and Mr Agrawal have been arguing the spambot stats, but their relationship appears to have deteriorated.
Mr Musk responded with a poo emoji on Monday to Mr Agrawal’s defense of the company’s spam reporting, later repeating his allegation that Twitter was underestimating the quantity.
Mr Musk has expressed concern that Twitter advertisers are unaware of what they are paying for.
“So, how do marketers know what they’re paying for? This is critical to Twitter’s financial stability “he wrote.
Mr Musk told a conference in Miami on Monday that “you can’t pay the same price for something that is substantially worse than they advertised” after putting his offer on hold.
He claimed a transaction at a different price is “not out of the question,” but added, “The more questions I ask, the more my reservations rise.”
Mr Musk has proposed that random samples of Twitter users be tested to identify bots. “There’s a potential it might be above 90% of daily active users,” he stated.
According to researchers, anything between 4% and 20% or more of the millions of Twitter profiles are bogus.
On Monday, Twitter shares fell more than 8% to $37.39, raising worries about Mr Musk’s ability to complete his acquisition at the agreed-upon price.
“It looks increasingly likely that Elon Musk is positioning to renegotiate a drastically lower price tag for Twitter or perhaps try and pull the plug on the agreement,” Susannah Streeter, senior investing and markets analyst at Hargreaves Lansdown, said.
She claims that determining the number of real Twitter users is “critical” to future revenue streams from advertising and paid subscriptions.
Mr Musk is “obviously rueing the timing of his impulsive offer to pay $44 billion for the social network,” Ms Streeter said, adding that “the volatility that has rocked tech markets and contributed to a steep decrease in Twitter’s valuation is also extremely likely to be part of the equation.”