Elon Musk puts his Twitter purchase on hold until he learns more about bot accounts

Elon Musk’s quest to purchase Twitter has hit several snags in recent weeks. Musk has been a huge advocate for cryptocurrencies, and crypto is massively crashing and burning right now. We have no idea how heavily Musk was invested in crypto or how he might be affected, but it’s interesting. In addition to the crypto crash, the stock market is not doing well, Musk’s own net worth has likely dipped. Not to mention Twitter’s stock price has gone down significantly since Musk’s initial offer:

As Elon Musk pursues ownership of Twitter, shares of the social media company are dropping, suggesting some concern among investors that the deal won’t reach the finish line. Twitter has slid nearly 13% since reaching its high for the year in late April. As of market close on Thursday, the stock traded at $45.08, well below the $54.20 that Musk agreed to pay on April 27. The difference represents more than $9 billion in market value.

Though Twitter’s board approved the purchase, it could still take months for the deal to close, and there’s no guarantee that it will. Musk would have to pay a $1 billion breakup fee should he choose to walk away. The Tesla CEO is worth more than $220 billion.

“The market is having marginally less confidence that the deal will go through due to regulatory challenges,” Mark Mahaney, an analyst at Evercore ISI, said in an email, adding that this is his “very quick interpretation” of the stock movement.

Before Musk made his bid to buy Twitter outright, he failed to disclose a more than 9% stake in the company within the SEC’s mandatory 10-day window. The Information reported that the Federal Trade Commission is probing the timing of Musk’s disclosure. Bloomberg later said the FTC is separately reviewing the acquisition itself, though many experts don’t expect the deal to raise antitrust concerns.

[From CNBC]

So if the deal goes through, he’s overpaying by more than $9 billion at this moment? Yikes. Which means that now is the moment for Elon Musk to create some excuse for why he probably won’t buy Twitter after all. Speaking of:

Elon Musk announced Friday that his Twitter deal is on hold until he receives more information about how many fake accounts there are on the social media platform. Twitter’s stock plummeted 18% following the announcement. A spokesperson for Twitter did not immediately respond to a CNBC request for comment.

Tesla CEO Musk announced last month that he intends to buy Twitter for $44 billion and he’s previously tweeted that one of his main priorities would be to remove “spam bots” from the platform. Even before Friday’s announcement, the company’s market value had fallen to $9 billion beneath the offer price due to concerns about the deal.

Twitter estimated in a filing earlier this month that fewer than 5% of its monetizable daily active users during the first quarter were bots or spam accounts. Musk, who is the world’s richest person on paper, now wants the company to confirm this before he continues with the deal, which is being partly funded by Oracle founder Larry Ellison and venture capital firm Andreessen Horowitz. The San Francisco-headquartered social media firm said in the filing that it had 229 million users in the first quarter who were served advertising.

[From CNBC]

“Sorry, I can’t spend $44 billion on Twitter until I find out if @MuskSuxx6969 is a bot account!” LMAO. Imagine holding up a $44 billion deal to purchase Twitter because you want more info about bot accounts! Jesus. Next he’ll say that the deal can’t go through during Mercury Retrograde. Then it will be “the deal can’t go through until we bring Hitler back and let him tweet!”

Photos courtesy of Avalon Red, Instar.

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45 Responses to “Elon Musk puts his Twitter purchase on hold until he learns more about bot accounts”

  1. JFerber says:

    Please, God, let the deal fall through.

  2. ThatsNotOkay says:

    Not only has he tapped Larry Ellison, but also the Saudis and Chinese, whom he’s already in bed with with Tesla, and whose governments have been among the worst in stifling free speech, which he so proudly proclaims to be his goal. No, his aim is stifling free speech and installing fascist overlords. Men after his own heart*. (*He has no heart.)

  3. Eurydice says:

    If Musk has two outside investors in on the buyout, then he might not be the only one asking questions. And it looks from this that Twitter estimates about 10 million bot/spam accounts in the first quarter – I’d want to confirm that so I’d know how much advertising is going to waste when making income projections. Do Musk and his investors think Twitter is lying about the bots, are the investors getting cold feet, is Musk starting to regret his offer? It could be all of this

    • MeganC says:

      Tesla’s stock is boosted by an army of bots. Musk desperately needs them.

    • Beenie says:

      This is the correct take (IMO).

      The investors might be asking questions or are being advised to by their counsel and the UNDERWRITERS. The banks. They care about this kind of stuff – their legal team, risk team, compliance, etc. I say this as someone who used to do exactly this kind of due diligence and who also worked for one of the underwriters on tech deals asking these types of questions (ex. the Facebook IPO).

      Not that the answer would necessarily scupper the deal, however. But yeah, during the transaction due diligence phase it does not surprise me one bit this is coming up (along with 10000 other questions that we aren’t hearing about in the news).

      For anyone curious: The lenders committing to the package include Morgan Stanley, Bank of America Corp., Barclays Plc, MUFG Bank Ltd., BNP Paribas SA, Mizuho Financial Group Inc. and Societe Generale SA.

      • WiththeAmerican says:

        This isn’t the due diligence phase. He waived that in April in order to entice twitter to accept his bid.

    • WiththeAmerican says:

      The bot numbers haven’t changed, though – they’ve stayed at 5% so the question is, why now.

      And why didn’t he ask about this before he made an offer?

      He waived due diligence. So this is on him.

      • kerfuffles says:

        “He waived due diligence” EXACTLY. So his “concerns” now are ridiculous.

        If it’s a bad deal because there are more bots than he thought, that is on him for making a rash, ego-driven move to offer billions of dollars to buy a company without first doing due diligence on WTF he was actually buying.

      • Jan90067 says:

        He did this for the attention. We all know he’s a raging narcissist who will do and say most things for the attention he garners.

        Check @ChristopherBouzy ‘s take on all of this. It’s spot on.

  4. KAP says:

    I have always felt, and will continue to maintain, that this deal would not go through. Musk, to me isn’t reliable and has passed the point of seriousness. I think he is crazy enough to get serious people involved in this deal and they say “sike.”

    • Bre says:

      @KAP I agree, I don’t think the deal will go through. The podcast Opening Arguments did a two-part on this and the lawyer really broke down all the things that have to happen and what could go wrong. It’s worth a listen.

    • Noo says:

      Elon is the king of nerd stunt ponies. We have reached a point of literal absurdity in our culture that whack jobs like him have unfathomable amounts of control and power.

      Also, does he think his poses look good on the red carpet? Does he look at those photos with pride? Probably says a lot about how distorted his world view is. Here’s hoping we can steer through the chaos to something better together.

    • MaGnomer says:

      Exactly.

      His companies are complete messes, which leads me to agree with this analysis

      It does bear repeating that some of us might like him to take his own rocket ship to Mars to give us a break.

  5. teehee says:

    Men are allowed to be such flakes. You don’t see women being indecisive on billion dollar deals but men? No one even calls it flaky and indecisive, rushed and incomplete— they just give it a pass.
    “Oh I’m sure he has a ‘smart’ reason (for being so inept) and will come up with a solution after the fact”

    How many more leaders are now literally just going to make their own problems that they then fix and claim as a victory somehow?

    • Wiglet Watcher says:

      It’s a silly thing for him to be uneducated about. Boys make up a huge portion of twitter. And I thought his plan to authorize and expose all names on account holders would cover this.
      This is an excuse because he didn’t understand how twitter users would boycott twitter out of spite or principles.

      • BothSidesNow says:

        I am with you Wiglet Watcher!! His investors are not too pleased either!! He does have others he has to answer to!

    • WiththeAmerican says:

      this!

    • Kalana says:

      A woman behaving like Elon Musk would have lost her company years ago and would be considered a national joke.

      • AppleCart says:

        And would have been arressted for the various financial crimes he has pulled these last few years playing with the market.

  6. LightPurple says:

    My purchase of Twitter is on hold until they install and edit feature.

  7. C-Shell says:

    LOL, yeah, no. This is all about the fact that his net worth has taken a huge hit over the past couple of weeks. It’s no surprise that (Trumpster) creep Larry Ellison is on board to provide part of the financing — which says so much about these MAGA bros. I’m starting to believe this deal is going to fall through, and I fervently hope so.

    • equality says:

      I agree. He was putting his other companies on the line with this purchase.

    • ThatsNotOkay says:

      Fortune printed on Wednesday that Bitcoin’s 50% crash has wiped out all of Musk’s Tesla gains on the balance sheet. How very MAGA of Musk.

      • C-Shell says:

        And you love to see it. Seeing the most popular cryptocurrency go from near $100 to less than $.00 in under a week has been breathtaking! LOL Next, let’s do NFTs.

  8. Talia says:

    He wants to be seen as the real life Tony Stark. He’s actually the real life Justin Hammer.

    • FancyPants says:

      Dingdingding we have a winning comment! I think whoever backs out of this deal (Musk or Twitter) has to pay $1 billion to the other side, too, so he’s trying to get Twitter to pull the plug.

  9. Merricat says:

    Elon Musk is mad as a hatter.

  10. Snuffles says:

    Fingers crossed that this deal falls through. I will continue to remain deactivated on Twitter either way.

    But let’s talk about bots. WHY are they allowed!? Why had Twitter never cracked down and banned them!? They are used to mount smear campaigns, push misinformation, try to influence elections. And to a lesser extent, influencers buy them to fake followers, likes, comments etc. so they can increase their value to advertisers and try to score deals.

    The damage they do is exponentially larger than their actual numbers. There is clearly a way to identify them. So why won’t they identify and remove them?

    • ELX says:

      If they ever got real about the bots, admitting how many accounts are fake AND how frequently bots are purchased to skew perceived popularity/engagement—Twitter wouldn’t have a viable business.

      Elon’s got actual PayPal money, but the rest is smoke and mirrors, i.e., not profitable or ever going to be profitable — serious people don’t show up high on investor calls.

    • North of Boston says:

      All the “negatives” you list about bots are a feature, not a bug.

      At least to TPTB.

  11. teresa says:

    Question, how much has Musk lost in the Fall of Crypto?

    • detritus says:

      Apparently he’s lost enough that it zeroes out all of the gains that Tesla made.
      Pajiba has a small piece on it

  12. detritus says:

    Slightly off topic, but I petition to only use Musk photos from before he had his plugs done.

  13. girl_ninja says:

    Musk is a mess, he’s tried to fool people that he is this super billionaire using smoke and mirrors. He’s such an embarrassment and seeing this deal for Twitter possibly fall apart and new recall of his cars warms the cockles of my heart 🙌

    Also:
    Tesla is recalling about 130,000 vehicles across its U.S. model lineup because their touch screens can overheat and go blank.

    Overheats and goes black, we can only hope the same for Musk.

  14. Lizzie Bathory says:

    I never thought Elon intended for this deal to be finalized. I think the idea was to get attention, gas up both Twitter & Tesla stock, pay the $1 billion fine & then flounce out after getting more headlines for his regular pronouncements (“I’m funded by Larry Ellison & a Saudi Prince! I’ll let Trump back on Twitter! I’m pausing the deal until I learn more about bots!”).

    He didn’t anticipate the current market correction or crypto collapse, but otherwise, I think things are going according to plan. Elon plays at business & employs competent people to make his whims a reality. He’s learned that what he’s really best at is getting attention online & manipulating stock prices using that attention. I have my doubts as to whether that is a viable long term strategy.

    • Carrotface says:

      Yeah $1 billion as a walking away penalty is nothing to him – I think he was planning to tank the value of twitter and walk away. Then while twitter has a much lower value, he can come in with anew and much lower offer. Plus he gets tons of his actual favorite currency: attention.

    • [insert_catchy_name] says:

      I also feel most of his stunts are just to mess with the stock market in a way that benefits him.

  15. Robert says:

    Doesn’t this just prove the Elon Musk is a horrible buisiness man. Shouldn’t all this have been found out before he made the offer. This might make the other investors look at Musk. He may end up losing more than twitter.

  16. Ameerah says:

    Just as I suspected…this is all just a giant stunt.

    • AppleCart says:

      I don’t think it was a stunt but he didn’t see the crypto market crashing. And a lot of his wealth is tied into it. He can’t afford Twitter now.

  17. HeatherC says:

    I love the shade… “the world’s richest person ON PAPER.” And we all know what paper is worth. I truly believe he’s asset rich and cash poor, but his assets are dwindling in worth. Will he ever have to pull an overnight shift at Taco Bell to make ends meet? No. But he’s not as rich as he likes to project he is.

  18. MsGnomer says:

    I have a difficult time believing Elon Musk is unaware of the bot farms in Russia.

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