Twitter's $44 billion acquisition by billionaire Elon Musk may not go through, according to CNET (via The Washington Post).
Twitter's Acquisition Is in 'Jeopardy'
Musk's team believes it won't be able to verify statistics regarding the amount of fake and spam accounts on Twitter and has paused some negotiations about funding the acquisition, according to The Post, which cited three anonymous people familiar with the situation.
This newest development in the ongoing conflict between Musk and Twitter.
Barrons reported that despite having access to internal data, Musk has been unable to determine the percentage of fake Twitter accounts.
It has only been roughly a month since Twitter granted Musk's team access to a "firehose" of data to support its allegations that bots make up less than 5% of its daily active user count, as per The Verge. That access only became available after Musk tweeted that the acquisition was "on hold," and Musk's attorneys filed a letter claiming the company was in "clear material breach" of the acquisition agreement by refusing to grant him access to the data.
According to the CNET report, Twitter claimed on Thursday that 1 million spam accounts are deleted every day. Less than 5% of Twitter's 229 million daily users were bogus or spam-focused in the first quarter, according to the company's reports.
Why Does Musk Want to Know the Number of Bots in Twitter?
As previously reported, Musk stated that the percentage of fake, spam, and bot accounts on the aforementioned platform is a very important issue in an interview with Bloomberg News Editor-in-Chief John Micklethwait at the Qatar Economic Forum in Doha. The business tycoon emphasized that he has been considering ways to improve Twitter's service during the forum.
Musk said that his ideal Twitter audience includes about 80% of North America and possibly 50% of the entire planet. To do this, he thinks that the platform needs to appeal to users in order for them to use it; as a result, it shouldn't be a place where they feel at ease or harassed.
Twitter's Ongoing Acquisition Issue
If Musk pulls out of the agreement to buy Twitter, it might lead to a legal dispute because the acquisition agreement contains a termination fee. According to a filing with the SEC on April 25, Musk would have to pay $1 billion in termination fees under the terms of the deal.
Wedbush Securities analyst Daniel Ives stated in a note on Thursday that the company thinks there is a 60% probability the deal would go through with a renegotiated price in the range of $42 to $45 per share, as per CNET report. According to Ives, there is a 35% probability that Musk will still break the agreement, pay the breakup fee, and likely go to court to fight Twitter's board.
Twitter is struggling with more than just Musk's potential acquisition. Social networks are attempting to reduce expenses as they prepare for a downturn. CNET noted that 30% of Twitter's talent acquisition team was laid off.
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