Elon Musk temporarily halts Twitter deal over user metrics
Tesla's Elon Musk has announced that he has put his purchase of Twitter on hold temporarily, ostensibly while he checks details about spam accounts.
Elon Musk
Musk's controversial purchase of Twitter is now at least delayed. It was already subject to a series of regulatory requirements, but Musk has tweeted that he personally has put the deal on hold.
According to BBC News, the issue of spam accounts that is holding up the deal relates to Twitter's claim that fewer than 5% of users on the service are fake. This figure was reported by Twitter in April 2022, as it announced its first-quarter results for the year.
The full earnings report included this detail, but qualifies it.
"In making this determination, we applied significant judgment," said the report, "so our estimation of false or spam accounts may not accurately represent the actual number of such accounts, and the actual number of false or spam accounts could be higher than we have estimated."
Fifteen days after this report, Musk now says he wants more details about this calculation. If either he or Twitter decide not to proceed with the deal, they have to pay the other party a termination fee of $1 billion.
Wedbush analyst Dan Ives told BBC News that Musk's latest tweet would "send this Twitter circus show into a Friday the 13th horror show."
"The nature of Musk creating so much uncertainty in a tweet (and not a filing) is very troubling to us," continued Ives, "and now sends this whole deal into a circus show with many questions and no concrete answers as to the path of this deal going forward."
Since the announcement of the hold, Twitter stock is down in after-hours trading over 13% to $38.86.
Read on AppleInsider
Elon Musk
Musk's controversial purchase of Twitter is now at least delayed. It was already subject to a series of regulatory requirements, but Musk has tweeted that he personally has put the deal on hold.
Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of usershttps://t.co/Y2t0QMuuyn
-- Elon Musk (@elonmusk)
According to BBC News, the issue of spam accounts that is holding up the deal relates to Twitter's claim that fewer than 5% of users on the service are fake. This figure was reported by Twitter in April 2022, as it announced its first-quarter results for the year.
The full earnings report included this detail, but qualifies it.
"In making this determination, we applied significant judgment," said the report, "so our estimation of false or spam accounts may not accurately represent the actual number of such accounts, and the actual number of false or spam accounts could be higher than we have estimated."
Fifteen days after this report, Musk now says he wants more details about this calculation. If either he or Twitter decide not to proceed with the deal, they have to pay the other party a termination fee of $1 billion.
Wedbush analyst Dan Ives told BBC News that Musk's latest tweet would "send this Twitter circus show into a Friday the 13th horror show."
"The nature of Musk creating so much uncertainty in a tweet (and not a filing) is very troubling to us," continued Ives, "and now sends this whole deal into a circus show with many questions and no concrete answers as to the path of this deal going forward."
Since the announcement of the hold, Twitter stock is down in after-hours trading over 13% to $38.86.
Read on AppleInsider
Comments
He may have to pay a BN but if he makes a few BN from the stock manipulation he’d come out ahead.
EDIT: Now that I think of it, if the financing falls through he might not have to pay. That would explain why he’s made several moves to depress the value of the Tesla stock he’s using as collateral.
https://www.dailymail.co.uk/news/article-10751017/Elon-Musk-seize-Twitter-TODAY-talks-reach-final-stages.html
"[The CEO] told employees that their stock options would convert to cash when the deal with Musk closes, which he estimated would take three to six months."
The deal was agreed though so backing out would be costly ($1b, maybe more) and may not be allowed.
Twitter's earnings are here:
https://d18rn0p25nwr6d.cloudfront.net/CIK-0001418091/947c0c34-ca90-4099-b328-a6062adf110f.pdf
Revenue in 2021 was $5b (90% from ads) net loss $221m, partly due to a big litigation cost. Revenue, monthly actives and assets look healthy enough to be profitable. $44b is a high price to pay for it though.
Given that Twitter makes so much from ads, maybe they purposely don't tackle bots as they will help generate ad impressions. Potentially at a higher rate than normal users if they open more pages. Everybody starts with good intentions until they cause a heavy impact to revenue. Conflict, self-affirming misinformation, abuse and bots all drive views/engagement, which provides revenue for ad-supported sites.
God, the mystique. I can't even.
He knew about it. Everyone knew the numbers. The public knew the numbers. People who read THIS site knew the numbers. He's using it as an excuse. He's testing to see exactly how criminal he can be and still not suffer any consequences.
Anyone seen his pitch deck for the future of Twitter? It's fulllllll of bullshit:
931 million — Musk’s target for user numbers by 2028. They have 229 daily active users with a growth of about 15% right now, which if that continues reaches only 550 million users by '28. Where does he get all those other users? ¯\(°_o)/¯
Twitter currently makes $5B/year. Musk wants it to make $26.8B by 2028. He wants ads to make $12B/year by 2028 and wants $10B to come from paid subscriptions — 69 million of them (ha ha "69" nice, bro). How? ¯\(°_o)/¯
He wants to create a mysterious product called X, that will have 104 million subscribers by 2028. What is it? ¯\(°_o)/¯
Twitter’s current workforce is around 7,500 people. Musk wants to increase that to 9,225 by 2022-end, slash it to 8,332 by 2023, and increase it again to 11,072 by 2025. Why those very specific numbers? ¯\(°_o)/¯
[ insert weird nerds defending Musk from valid criticism meme here ]
Announcer: He is.