As Elon Musk and Twitter Battle Over Bots, Some Say Musk Wants Out

Meanwhile, the added uncertainty of the Musk-Twitter deal being on hold has sent stocks sledding as an analyst says it’s 50-50 a deal will happen
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Tesla and SpaceX boss Elon Musk might be looking to back out of the Twitter deal with his fixation on counting bots and spam accounts holding up the deal, Dan Ives, a Wedbush analyst, told Business Insider.

Ives estimated that the likelihood of Musk actually going through with the deal at under 50 percent, and suggested Musk may also use the bot issue to talk down the price. If he gets cold feet and puts the kibosh on the whole scheme, Musk will have to pay a $1 billion “breakup fee.”

The fact that Musk is putting up part of Tesla to finance the deal gives him that much more incentive to wrap it up.

“Musk is still committed to the deal per his tweets and appears like he wants to get it done, but the financing stress and equity financing overhang on his golden child Tesla has cast a long shadow on this deal,” Ives said.

On Friday, Musk tweeted that his acquisition of Twitter while  “temporarily on hold” while he looked to verify Twitter’s claim that fake or spam accounts made up for less than five percent of its daily active users during the first quarter. The exact number of active users is important for advertisers, as Musk pointed out in a tweet to Twitter CEO Parag Agrawal, when Agrawal was posting a series of tweets explaining how Twitter fought spam and fake accounts and counted its mDAU (monetized daily active users).

“So how do advertisers know what they’re getting for their money? This is fundamental to the financial health of Twitter.” Musk wrote back.

Agrawal maintained that Twitter’s internal measure for fake accounts and bots was “<5 per cent.”

Musk, for his part, has supposedly told investors that his Twitter wouldn’t rely so heavily on advertising revenue but instead earn money from subscriptions, according to the Verge.

Meanwhile, Musk is moving the markets yet again: when he disclosed his 9.1 percent stake in Twitter last month, the social-networking platform’s stock prices swelled 26 percent.

But on Monday, the stock fell 7 percent to $37.80, dipping below the $39.31 closing price on April 1, the “last trading session before Musk revealed his minority ownership in Twitter,” CNBC reports. Twitter stocks are currently undergoing a selloff, with investors worried that Musk might flake on the deal.

Musk offered to buy the company for $44 billion, or $54.20 a share (420 being a marijuana joke that Musk thinks is hilarious every, single time).


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