Musk set to abandon £35bn Twitter takeover if bot count isn’t clarified
Elon Musk has threatened to walk away from his $44bn (£35bn) takeover of Twitter, urging the social media network to provide more data on spam and fake accounts.
The topic of bots has been an ongoing point of contention for the Tesla founder, who criticised Twitter’s claims that less than five per cent of its monetisable daily active users were bots or scammers.
Writing to Twitter’s chief legal officer today, Musk’s lawyers argued that if the Silicon Valley giant does not provide more information on these fake accounts, the eccentric billionaire could abandon the deal.
As disclosed in a regulatory filing, the letter written by law firm Skadden Arps, Slate, Meagher and Flom suggested that Twitter “refused to provide the information that [he] has repeatedly requested since May 9”.
“Based on Twitter’s behaviour to date, and the company’s latest correspondence in particular, Mr Musk believes the company is actively resisting and thwarting his information rights (and the company’s corresponding obligations) under the merger agreement,” the letter stated.
Commenting on the move, Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown said: “This is a move Twitter investors have for weeks been steeling themselves for, the moment when Elon Musk’s haphazard ruminations in tweets have been distilled into an official letter to regulators.
“By openly accusing Twitter of breaching the merger agreement by not providing data on bots and fake accounts, it’s the strongest signal yet that the Tesla founder is prepared to walk away from the $44 billion deal”.
Twitter CEO Parag Agrawa has previously defended the company’s approach to bots, and clarified the state of play in a lengthy Twitter thread.
He wrote: “Unfortunately, we don’t believe that this specific estimation can be performed externally, given the critical need to use both public and private information (which we can’t share). Externally, it’s not even possible to know which accounts are counted as mDAUs on any given day.
“There are LOTS of details that are very important underneath this high-level description. We shared an overview of the estimation process with Elon a week ago and look forward to continuing the conversation with him, and all of you”, he added.
Bots are problematic for social networks because they have the ability to influence trending topics and sway political narratives by distorting events.
With some commentators framing Musk’s bot focus as a distraction tactic for negotiations, Facebook whistleblower Frances Haugen praised it as shifting the conversation away from purely optimising growth stats and profits, putting a greater onus on Silicon Valley to cough up honest figures.
“The reason they [social media giants] don’t take down bots is that one less bot will mean one less user. So if your user count goes down by one per cent, then the price of your stock can go down 10 or 15 per cent,” she told City PM in an interview last month.
Twitter shares are down over three per cent in early morning trading.