Elon Musk says Twitter deal is on hold over fake account numbers
Yahoo Finance tech reporter Dan Howley breaks down Elon Musk's latest tweet saying his Twitter deal has been put on hold while he investigates spam account numbers.
RACHELLE AKUFFO: Welcome back. Fake accounts and bots were some of the things Elon Musk hoped to fix by buying Twitter. Well, now the same issues have put the acquisition on hold for now. Yahoo Finance's Dan Howley has the latest information on this. Dan, what do we need to know?
DAN HOWLEY: Yes, basically Elon Musk apparently announced via tweet that he had put the purchase, the $44 billion purchase of Twitter, on hold for the time being. He says he's still committed to the acquisition, but he specifically points to a Reuters story that says Twitter says about 5% of its accounts, maybe less, are actually spam or automated. And that's really the sticking point that Elon Musk is looking at here. Now he had spoken of wanting to eliminate spam and automated account spam bots throughout his time before and after his announced acquisition.
And that seems kind of a wrench because it contradicts that narrative that there are so many spam bots on the platform that just overwhelm other people's voices, that is, regular users' voices. The interesting thing here, however, is that this is not a new revelation at all. If you go back to 2014 and look at Twitter's 10-Q reports each quarter, you can see that they specifically point to the same 5% figure each time. They say they did studies, they do tests. And it comes back to about 5%.
And Twitter has previously said they have an entire team dedicated to wiping out spam bots on the platform. Well, yes, there are spam bots. Yes, we have met them all. But according to the company, at least, they're not as prolific as Elon Musk may have thought or believed. Well, why is this coming out now? Who knows? Of course, the lingering theory for at least some people on Twitter is that there's an easy way for him to get out of the $44 billion acquisition.
Apparently, he had to personally stake a lot of his Tesla stock to make sure he could get it. But he got support from other organizations to raise that kind of money. But it really seems to be up in the air at this point, although he says he's still committed to acquisition, again, this is something that's been available for a while. But Elon Musk looking at this Reuters story seems to be saying oh I didn't know that. Well, you would think he would have done due diligence.
DAVE BRIGGS: That's exactly what I thought when I first heard this story. This is part of a very typical due diligence research here. And even that Reuters story is from May 2nd. Couldn't Elon Musk have done that privately and quietly, unless of course he was trying to challenge it or [INaudible] the stock?
DAN HOWLEY: Yeah, I mean, look, that's his style, right? He prefers to do everything in public outdoors. You know, I mean, I think it's really for the attention. In general, he loves using his Twitter platform to either get a reaction from people or start a discussion on various topics. And that in particular seems like he's trying to evoke some sort of reaction, or maybe he just wanted to let people know early on that there's a chance that might not happen, although again he says he's still committed to acquiring it .
You know, when you throw something like that out there, you say it's on hold. It is difficult to say whether it will continue or not. But we just saw the Twitter report filed with the SEC stating that as of a certain date this month, Twitter employees will no longer be allowed to participate in the employee stock purchase program. So, you know, Twitter clearly thinks this is going to happen, and they're bracing for the eventuality that Musk will buy them. But it seems this just throws a wrench into the job now.
EMILY MCCORMICK: All right, Dan Howley from Yahoo Finance, thanks a lot.
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