Elon Musk Backtracks on Twitter Deal

By Michael Hein

Elon Musk is changing his tune when it comes to Twitter. The billionaire previously offered to purchase the website for $44 billion, but now stipulates that the current operators must prove that its userbase is legitimate. Musk tweeted that he believes 20% of Twitter accounts or more may belong to bots and fake users.

According to a report by The Wrap, Twitter's filings with the Securities Exchange Commission (SEC) indicates that 5 percent or less of its userbase is comprised of fake accounts and spam bots. Twitter's CEO Parag Arawal has reportedly declined to publish the data on that figure publicly. On Tuesday morning, Musk responded to a tweet that said that the real number of fake accounts is likely around 20%. Musk wrote: "20 percent fake/spam accounts, while 4 times what Twitter claims, could be *much* higher."

"My offer was based on Twitter's SEC filings being accurate. Yesterday, Twitter's CEO publicly refused to show proof of <5 percent. This deal cannot move forward until he does," Musk concluded.

This is essentially a reversal for Musk, who previously offered to buy Twitter and take it private for more than the cost of each individual share. While the company's board was willing to take this offer, some Twitter employees and many Twitter users seemed to resist the idea at first. Now it seems like Musk himself is backtracking on his offer as he looks more deeply into Twitter's inner workings.

While some disclosures are bound to come in the discovery phase of this monumental purchase, Arawal argues that the confirmation Musk wants about fake accounts cannot be shared outside the company. He argues that the true confirmation needed to assure Musk would include private information about users which Twitter cannot share outside of the company according to its own terms of service. When he explained this in a tweet on Monday, Musk responded with a poop emoji.

Still, Musk's hesitation may cost him more than it will cost Twitter. At this point in the purchasing process, he would reportedly be on the hook for up to $1 billion in breakup fees if he were to cancel the acquisition. Some people are speculating that Musk may simply be trying to fight for a better price, though he has not said as much. However you look at it, Musk's offer to buy Twitter is in its strangest phase yet.

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