Transaction on Twitter is “temporarily suspended”

Transaction on Twitter is "temporarily suspended"

Elon Musk said Friday that his $44 billion acquisition of Twitter is “temporarily on pause” pending information on spam and phony accounts on the social media network, adding to evidence of internal strife over the proposed deal.

Transaction on Twitter is “temporarily suspended”

“Twitter agreement on hold temporarily for details supporting computation that spam/fake accounts do actually represent less than 5% of users,” Musk stated, implying that he doubts the number of fraudulent accounts is that low.

In a tweet, the Tesla billionaire linked to a Reuters piece dated May 2 quoting a Twitter financial filing that indicated fraudulent or spam accounts accounted for less than 5% of the company’s “monetizable daily active users” in the first quarter.

It wasn’t clear whether the issue could scuttle the deal. Shares of both Twitter and Tesla swung sharply in opposite directions, with Twitter’s stock tumbling 17% to $37.20 before trading opened in the U.S, and Tesla, which Musk had proposed using to help fund the Twitter deal, jumping 5%. Twitter’s stock price is now well below the $54.20 per share that Musk agreed to pay for the company.

Twitter disclosed its findings on bot and spam accounts in a filing for its first-quarter results. The company said, “We have performed an internal review of a sample of accounts and estimate that the average of false or spam accounts during the first quarter of 2022 represented fewer than 5% of our [monetizable daily active users] during the quarter.”

Calling Musk’s tweet “bizarre,” Wedbush Securities analyst Dan Ives said, “The implications of this tweet will send this Twitter circus show into a Friday the 13th horror show as now the Street will view this deal as 1) likely falling apart, 2) Musk negotiating for a lower deal price, or 3) Musk simply walking away from the deal with a $1 billion breakup fee.”

Twitter added that it was possible that “the actual number of false or spam accounts could be higher than we have estimated.”

Academic researchers in 2017 attempted a census of all of Twitter’s active English-language accounts and estimated that up to 15% were bots of some kind. Emilio Ferrara, a professor at the University of Southern California who helped lead the research, said Friday that Twitter has gotten better at detecting and constantly deleting spam accounts – but they are added to the platform all the time.

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