Tesla Inc (NASDAQ:TSLA) CEO Elon Musk on Monday estimated at least 20% of Twitter Inc (NASDAQ:TWTR) users are fake accounts, alleging that the microblogging site’s public filings revealing those numbers are not accurate and that the deal is likely worth “much worse” than claimed.
What Happened: The billionaire entrepreneur, speaking remotely at Miami tech conference All-In Summit 2022, said a Twitter deal at a lower price would not be “out of the question.” The number of bots on Twitter is as "unknowable as the human soul basically," he added.
“This is a material misstatement if they have in fact been surreptitiously claiming less than 5% are fake accounts but, in fact, it is four or five times..or perhaps 10 times that number,” Musk said.
The billionaire entrepreneur, who last week put the agreement on hold as he questioned Twitter's publicly disclosed data on the number of spam and fake accounts on its platform, did not explain how he arrived at those numbers.
“This is a big deal..in making the Twitter offer I was reminded about the truth of their public filing. Those files are not accurate. You cannot pay the same price for something that’s much worse than they claimed.”
Musk, in response to a follow-up question, said a deal at a lower price “is not out of the question” but it needs to be “fixable” and be doable in a “reasonable time frame.”
The world’s richest man said he relied on Twitter’s public filings and did not cross-question the authenticity of its number of users. Investors rely on the accuracy of filings whether they are buying one share or the whole company.”
Will He Buy Or Walk Out?: Musk’s comments followed Twitter CEO Parag Agrawal’s series of tweets on Monday explaining the methodology behind the social media company’s estimate that spam makes up less than 5% of its user base.
He argued that the number could not be accurately ascertained by third parties without access to data such as IP addresses, geolocation and phone numbers.
The world’s richest man’s comments also fuelled more speculation that Musk could be looking to walk out of the deal.
Wedbush Securities analyst Dan Ives said Musk likely has developed “cold feet” on the $44 billion take-private deal of Twitter, a platform he has said is the bedrock of democracy.
Price Action: Twitter shares closed 8.8% lower at $37.39 on Monday, while Tesla's closed 5.8% lower at $724.37.
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