Elon Musk’s $44 billion acquisition of Twitter is on hold, according to the Tesla CEO and billionaire, because of the level of fake accounts.
However, the details that Musk cites as reasons have been known since 2019. Newsweek has learned Musk’s announcement that the deal is pending wiped 15 percent off Twitter’s share price in premarket trading.
Musk said in a tweet on Friday: “Twitter settlement temporarily on hold pending details supporting calculation that spam/fake accounts actually represent less than 5% of users”
Musk’s pending statement included a link to a Reuters article in which a brief summary of the filing cited the 5 percent figure. The article did not mention the earlier filings.
Twitter said in its Q1 2022 letter to shareholders that
We conducted an internal review of a sample of accounts and estimate that the average fake or spam accounts during the first quarter of 2022 represented less than 5% of our mDAU during the quarter. False or spam accounts for a period represent the average of sampled false or spam accounts during each monthly analysis period during the quarter. In making this determination, we exercised significant judgment, so our estimate of fake or spam accounts may not accurately represent the actual number of such accounts, and the actual number of fake or spam accounts may be higher than what we have estimated.
However, the company has said almost word for word the same thing in the previous 11 quarterly reports, only changing the date in the first sentence. The figure, 5 percent, has been constant.
All of Twitter’s previous reports are available on the company’s investor page. The first to mention the fake account rate was the second quarter of 2019—almost three years ago.
The news from Musk sent Twitter’s share price down in premarket trading.
At one stage, shares were trading at just $34, nearly $20 less than Musk’s offer. At the time of writing, the stock was trading at $40.40 per share, down about 10 percent. The price Musk has set on Twitter is $54.20 per share, about $44 billion in total.
Musk has been vocal about free speech and fake Twitter accounts, and has announced that he thinks former President Donald Trump should return to the platform.
The South African entrepreneur has said that one of his priorities when taking over the social media platform would be to remove the “junk worlds” from it and find a way to verify all people.
Musk will have to pay a $1 billion termination fee if he walks away from the deal with Twitter.
Musk’s office has been contacted for comment.
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