‘The bots are angry at being counted’: Elon Musk says his team ‘will do a random sample of 100 Twitter followers’ to see how many are bots as he weighs proceeding with $44B takeover and exclusive photos show him hours before pausing deal
Tesla CEO Elon Musk (pictured) was seen going to a dinner party at the Beverly Hills Hotel on Thursday evening, just hours before he put his Twitter acquisition on hold – and the weight of the decision appeared to be weighing on him. The billionaire was glued to his phone and looked extremely serious.
Tesla CEO Elon Musk and his team are preparing their own audit of 100 Twitter followers to check how many are bots and spam accounts. Earlier, citing a week-old regulatory filing from Twitter, Musk claimed that he wanted to pause the deal to verify that false or spam accounts represented fewer than 5 per cent of the company’s 229 million users during the first quarter.
Musk tweeted Thursday his $44 billion acquisition of Twitter was on hold as he investigates the company’s internal audit. On Friday he followed that up saying: ‘To find out, my team will do random sample of 100 followers of Twitter. I invite others to repeat the same process and see what they discover…’
He later joked: ‘The bots are angry at being counted.’ Twitter’s official account, @Twitter, has 61.7 million followers, meaning Musk has a large group to choose from.
The world’s richest man also said that he was still committed to the acquisition. If Twitter’s reporting is accurate, that would mean that there are fewer than 11.4 million fake accounts that are targeted for ads. Musk has 92.4 million Twitter followers.
Musk was escorted by three security guards as he made his way into the Beverly Hills Hotel for a dinner party. Musk appeared to be glued to his phone just hours before shocking Wall Street by announcing his deal to buy Twitter would be put on hold.
Trump, commenting on his Truth Social platform on Friday, suggested that Musk is looking to negotiate a better deal to buy Twitter after agreeing to pay $54.20 per share. The former US president said the only reason the Tesla CEO had not called off the Twitter deal yet was because of the $1 billion break-up fee. ‘There is no way Elon Musk is going to buy Twitter at such a ridiculous price, especially since realizing it is a company largely based on BOTS or Spam Accounts,’ Trump wrote as he added jabs at the rival social media company. ‘If it weren’t for the ridiculous Billion Dollar breakup fee, Elon would have already been long gone,’ he added.
This week, Musk has also sparked fierce debate after saying he would allow Trump back on Twitter if and when he takes the reins, in line with his previous declarations that he planned to err on the side of free speech rather than bans and censorship. Trump has repeatedly stated that he has no plan to go back to Twitter after he was removed from the platform following the January 6 Capitol riot.
Musk’s surprise tweets early Friday sent Twitter stock plunging in the pre-market, as analysts speculated that Musk is trying to negotiate a lower price for the deal or pull out completely. Twitter CEO and board member Parag Agrawal (pictured) has insisted that he still expects the deal to go through as the company prepare for the transfer of power. In a lengthy Twitter thread on Friday, Agrawal wrote: ‘While I expect the deal to close, we need to be prepared for all scenarios and always do what’s right for Twitter.’ Agrawal also addressed his move on Thursday to fire two top Twitter execs, saying that he is ‘accountable for leading and operating Twitter, and our job is to build a stronger Twitter every day.’
If Elon walks away from the deal, Musk would not only be on the hook for a $1 billion termination fee, he could also be sued by Twitter for breach of contract. A senior M&A lawyer familiar with the deal told CNBC that Twitter could also sue Musk if he were to try and abandon the deal simply because he felt he overpaid. Like Trump, others have speculated that Musk’s surprise move on Thursday came as a result of trying to renegotiate a better deals as Twitter stocks have dropped since the buyout was set at $54.20 per share last month. ‘This is probably a negotiation tactic on behalf of Elon,’ Toni Sacconaghi, Bernstein senior research analyst, told CNBC on Friday. ‘The market has come down a lot. He’s probably using the guise of true active users as a negotiation ploy.’
Shares of the social media company fell as much as 25 percent in premarket trading this morning, continuing a massive downward trend since his takeover bid was accepted by Twitter’s board on April 25. It is not clear what the legal effect of his tweet was, and some analysts were baffled that he announced the move on Twitter rather than a regulatory filing. Wedbush analyst Dan Ives called Musk’s tweet ‘bizarre’ and said that it ‘now sends this whole deal into a circus show with many questions and no concrete answers… Many will view this as Musk using this Twitter filing/spam accounts as a way to get out of this deal in a vastly changing market,’ Ives wrote in a note. ‘If Musk does decide to still go down the deal path a clear renegotiation is likely on the table,’ he added.
Meanwhile, Tesla shares, against which Musk has secured $6.25billion in funding for the acquisition, were up about 5 percent early Friday. Tesla stock has been slumping, and is down 28 percent in the past month, amid investor concern that the Twitter deal will divide Musk’s attention, and that financing issues would force him to dump more of his Tesla holdings. The decline in Tesla’s share price has increased concerns about Musk’s ability to finance the Twitter deal. At Thursday’s closing price, Musk would have to put up more than a quarter of his Tesla shares to secure the $6.25 billion margin loan.