What you need to know
- Elon Musk's Twitter acquisition is reportedly in "serious jeopardy".
- A new report claims Musk's camp has found big problems with the figures Twitter gave about spam accounts on its platform.
- Musk's team could now take "drastic action" in light of the revelation.
Update, July 8 (6:10 pm ET): Elon Musk has now officially filed in an attempt to terminate his agreement to buy Twitter. You can read that story here.
A new report says that Elon Musk's Twitter acquisition could be in "serious jeopardy" following the revelation that Twitter's figures on spam accounts cannot be verified.
The Washington Post reports:
Elon Musk's deal to buy Twitter is in serious jeopardy, three people familiar with the matter say, as Musk's camp concluded that Twitter's figures on spam accounts are not verifiable.Musk's team has stopped engaging in certain discussions around funding for the $44 billion deal, including with a party named as a likely backer, one of the people said. The people spoke on the condition of anonymity because of the sensitivity of the ongoing discussions.
The news is the latest twist in an ongoing saga surrounding just how many of the accounts on Twitter are actually real, and what proportion are spam or fake. Musk has been given a "fire hose" of data from Twitter to try and establish what's really going on, but the data may have actually torpedoed the deal instead. The report says talks with investors have "cooled in recent weeks" and that "now that Musk's team has concluded it cannot verify Twitter's figures on spam accounts... it is expected to take potentially drastic action."
The same source said "it was likely a change in direction from Musk's team would come soon" but not what that could entail.
Wedbush's Dan Ives said that there now seem to be three paths ahead, but said that the likelihood of the deal closing on the original terms of a $54.20 share price worth $44 billion total was now less than 5%. He says it is more likely that there will be a renegotiated price of between $42-$45 per share, or possibly a court battle as Musk tries to get out of the deal.
The deal currently includes a $1 billion fee for either party should they choose to walk away save for a large legal problem, the Post cites experts who say there is doubt that the singular issue of bots and spam would qualify as extenuating circumstances. It seems that the Twitter acquisition (at least in its current form) is in serious jeopardy.
