Twitter’s takeover is on hold for now says Elon Musk

Elon Musk has put his $44 billion (£36 billion) bid for Twitter on hold after the social media network stated that just 5% of its users were spam or fraudulent accounts.

In a statement that showed scepticism, the Tesla CEO tweeted on Friday morning that the deal was being halted while he sought data backing Twitter’s allegation.

Musk announced the decision with a link to a Reuters report from May 2 that referenced a filing with the US Securities and Exchange Commission in which Twitter stated that fraudulent or spam accounts accounted for fewer than 5% of its daily average users.

Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of usershttps://t.co/Y2t0QMuuyn

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— Elon Musk (@elonmusk) May 13, 2022

Musk has committed to pay Twitter a $1 billion break fee if he pulls out of the arrangement. Twitter’s stock dropped 15% in pre-market trade to $38.21 on the news, raising fears that the acquisition will fall through.

The agreed-upon purchase price for Twitter is $54.20 per share. However, due to a drop in tech equities and a poor financial performance at the social media site, a known US short-selling business, which accepts bets against companies’ share values, indicated this week that Musk may submit a reduced proposal for Twitter.
In pre-market trade on Friday, Tesla shares were up over 6%.

Musk has raged against artificial or “bot” Twitter accounts, which aren’t operated by real people, and claimed following the takeover that he wants to enhance the network by “authenticating all humans.”

Twitter permits automated accounts ranging from catastrophe early warning systems to algorithmic art to operate on the site. It adopted a new “automated account” label in 2021 to publicly identify accounts that are managed by a machine rather than a human. However, such accounts must adhere to tight guidelines or risk losing access.

Musk’s initial purchase of Twitter shares may have been driven by one of these automated accounts. The @elonjet Twitter account, which was created by a 19-year-old aviation enthusiast, tracks and automatically tweets the position of Elon Musk’s private plane using public flight tracker data.

Musk offered the adolescent $5,000 to buy the account and close it down in January, but the creator countered with a $50,000 offer. He started buying Twitter stock a few days later and filed his formal declaration that he owned a significant investment in early April.

Spam accounts, which purposefully abuse Twitter’s rules of service in pursuit of commercial or political aims, outweigh declared automated accounts like @elonjet.

These accounts might be used to send advertisements or scams to other users via the reply feature or direct messaging, or they could be used to influence public opinion by tweeting political propaganda.

Individual users may buy followers, likes, and retweets from “bot merchants” who manage hundreds or millions of false accounts.

After the release of a report investigating social media manipulation in 2017, Samuel Woolley of Oxford University remarked, “Bots vastly magnify the power of one person to attempt to manipulate people.” “Imagine an obnoxious Facebook buddy who is constantly provoking political battles. “Wouldn’t it be much worse if they had a 5,000-strong bot army?”