Elon Musk temporarily halts Twitter deal over user metrics

Posted:
in General Discussion
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
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.

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Comments

  • Reply 1 of 28
    M68000M68000 Posts: 452member
    Or buy it and fix the issue? 
    9secondkox2watto_cobra
  • Reply 2 of 28
    crowleycrowley Posts: 10,159member
    Nice if Twitter gets a free billion from the wazzock.
    ronnviclauyycmuthuk_vanalingam9secondkox2tyler82
  • Reply 3 of 28
    Sounds like Tesla's stock price plunge has made Musk's financing approach a costly mistake. This could just end up in the courts as a battle over who has to pay the billion for the deal falling through. 
    ronntmaynetroxviclauyycfastasleepAlex1Nstevenoztyler82watto_cobra
  • Reply 4 of 28
    blastdoorblastdoor Posts: 2,683member
    So Musk’s glorious invasion of Twitter isn’t going so well, eh? Interesting….
    williamlondon9secondkox2tyler82watto_cobra
  • Reply 5 of 28
    DAalsethDAalseth Posts: 2,051member
    This being a very elaborate pump and dump is still on the table.
    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. 
    edited May 13 tmayAlex1Nmuthuk_vanalingam9secondkox2watto_cobra
  • Reply 6 of 28
    BeatsBeats Posts: 3,048member
    I thought he owned it already. Saw a few “Elon Musk buys Twitter” headlines. 
    cornchip
  • Reply 7 of 28
    oldcastleoldcastle Posts: 23member
    It's buyers remorse or he's trying to lower the price. Not a person to deal with. 
    9secondkox2watto_cobra
  • Reply 8 of 28
    cornchipcornchip Posts: 1,902member
    Beats said:
    I thought he owned it already. Saw a few “Elon Musk buys Twitter” headlines. 
    Headlines never lie.
    viclauyycAlex1Nfastasleepmuthuk_vanalingamwatto_cobra
  • Reply 10 of 28
    9secondkox29secondkox2 Posts: 1,242member
    Smart man. No one wants to purchase problems. Have the current leaders fix it before purchase. 

    Same as buying a house or car. 

    Spam accounts are a huge problem that need resolution ASAP. 
    viclauyycentropysjcs2305watto_cobra
  • Reply 11 of 28
    9secondkox29secondkox2 Posts: 1,242member
    M68000 said:
    Or buy it and fix the issue? 
    He’s already paying well over the actual value. 

    1. This shows the pure incompetence of current Twitter leadership. 

    2. You wouldn’t buy a house with a broken foundation. That’s pretty close to equivalent here. Let the owners invest in fixing the issue and get it purchaseable. 

    3. I believe Elon will follow through with purchase regardless. But doing what he can to avoid inheriting someone else’s issues - and the blame for the other folks’ incompetence. 

    4. Stock manipulation of Tesla isn’t going to last forever, no matter the DOJs illegal threats to harm Tesla if this civilian buys a civilian company. 
    edited May 13 viclauyycentropysbeowulfschmidth2pjcs2305watto_cobra
  • Reply 12 of 28
    entropysentropys Posts: 3,468member
    This episode is the most entertaining meltdown since the 2016 Presidential election.
    ronnwatto_cobra
  • Reply 13 of 28
    Now if he could just halt being a d**k.
    dewme9secondkox2ronndavenAI_liaswatto_cobra
  • Reply 14 of 28
    MarvinMarvin Posts: 14,757moderator
    Beats said:
    I thought he owned it already. Saw a few “Elon Musk buys Twitter” headlines. 
    It takes time to close deals of this size, the Twitter CEO said 3-6 months:

    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.
    Alex1Ndewmemuthuk_vanalingamronnrundhvidh2pwatto_cobra
  • Reply 15 of 28
    Smart man. No one wants to purchase problems. Have the current leaders fix it before purchase. 

    Same as buying a house or car. 

    Spam accounts are a huge problem that need resolution ASAP. 

    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.
    Alex1Nmuthuk_vanalingamwelshdogronndavenAI_liaswatto_cobra
  • Reply 16 of 28
    fastasleepfastasleep Posts: 6,104member
    Beats said:
    I thought he owned it already. Saw a few “Elon Musk buys Twitter” headlines. 
    LOL. Ten bucks says that if you actually read the articles beyond the headlines, you'd have seen that it was a pending deal.
    muthuk_vanalingamwatto_cobra
  • Reply 17 of 28
    fastasleepfastasleep Posts: 6,104member
    I'm increasingly inclined to believe Musk in this situation is a) the world's biggest troll, b) manipulating the market for personal gain, c) actually not the galaxy brain that his cultists believe he is, or most likely d) all of the above.

    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 ]
    welshdogronndavenwatto_cobra
  • Reply 18 of 28
    danoxdanox Posts: 972member
    Smart man. No one wants to purchase problems. Have the current leaders fix it before purchase. 

    Same as buying a house or car. 

    Spam accounts are a huge problem that need resolution ASAP. 
    There’s nothing to fix they (Twitter) doesn’t make much of a profit (never have), and soon Tesla will join them, because half of Tesla’s paper profit is subsidized by the government.
    dewmewelshdogwatto_cobra
  • Reply 19 of 28
    iqatedoiqatedo Posts: 1,741member
    I'm increasingly inclined to believe Musk in this situation is a) the world's biggest troll, b) manipulating the market for personal gain, c) actually not the galaxy brain that his cultists believe he is, or most likely d) all of the above.

    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 ]
    Buying Twitter is a huge distraction that Musk does not need. Can't believe that he went ahead. Perhaps he's looking for an 'out'.
    dewmewatto_cobra
  • Reply 20 of 28
    welshdogwelshdog Posts: 1,826member
    iqatedo said:
    Perhaps he's looking for an 'out'.

    Announcer: He is.
    watto_cobra
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