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 which stated that his Twitter deal was on hold while he investigates spam account numbers.
Video Transcript
RACHELLE AKUFFO: Welcome back. Fake accounts and bots were some of the things that Elon Musk wanted to fix by buying Twitter. Well, now those same issues have put the acquisition on hold for now. Yahoo Finance's Dan Howley has the latest on this. Dan, what do we need to know?
DAN HOWLEY: Yeah, so basically Elon Musk announced via tweet, obviously, that he has put the purchase, the $44 billion purchase of Twitter on hold for now. He says he's still committed to the acquisition, but he specifically points to a Reuters story that had said that Twitter says about 5% of its accounts, maybe less, are actually spam or automated. And that's really the sticking point here that Elon Musk is looking at. Now he had talked about wanting to eliminate spam and automated account spam bots throughout his kind of lead-up and after his announced acquisition.
And this seems to kind of throw a wrench in that because it goes against that narrative that there are so many spam bots on the platform that are just overwhelming other people's voices, meaning regular users' voices. Now, the interesting thing here, though, is that this isn't a new revelation at all. In fact, if you go as far back as 2014 and you look at Twitter's 10-Q filings each quarter, you can see that they specifically point out that same 5% figure each time. They say they've run studies, they run tests. And it comes back at about 5%.
And Twitter has said, previously, that they have an entire team dedicated to wiping out spam bots on the platform. Now, yes, there are spam bots. Yes, we've all encountered them. But according to the company, at least, they're not as prolific as Elon Musk may have thought or may have believed. Now, why is this coming out now? Who knows? The ongoing theory for at least some people on Twitter, of course, is that it's an easy way for him to get out of the acquisition, $44 billion.
Obviously, he had to use a lot of his Tesla shares in this personally to ensure that he could get it. But he did get some backing from other entities to raise that kind of money. But it really seems to be up in the air at this point, despite the fact that he says that he's still dedicated to the acquisition, again, this is something that has been available for some time. But Elon Musk looking at this Reuters story, seeming to say, ooh, I didn't know that. Well, you would think that due diligence, he would have.
DAVE BRIGGS: That's exactly what I was thinking 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 2. Couldn't Elon Musk have done this privately and quietly, unless, of course, he was trying to egg it out or [INAUDIBLE] the stock?
DAN HOWLEY: Yeah, I mean, look, that's his style, right? He likes to do everything publicly out in the open. You know, I mean, I think it's really for the attention. He clearly loves to use his Twitter platform for that, in general, just to either get a reaction from people or start a discussion about different topics. And this, in particular, it seems like he wanted to get some kind of reaction, or maybe he just wanted to let people know early that there's a chance that this doesn't happen, despite, again, the fact that he says he's still committed to the acquisition.
You know, when you throw something like this out there, you say that it's on hold. It's tough to really determine whether or not it will go forward. But we did just see the Twitter filed with the SEC paperwork, saying that Twitter employees will not be allowed to participate in the Employee Stock Purchase Program anymore after a certain date this month. So, you know, Twitter clearly thinks that this is going to happen, and they're preparing for the eventuality that Musk will purchase them. But it seems to be that this is just throwing a wrench in the works now.
EMILY MCCORMICK: All right, Yahoo Finance's own Dan Howley, thank you so much.
