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Musk says Twitter deal “on hold” over concern about number of spam accounts

In this photo illustration, Elon Musk's twitter account is displayed on a smartphone in front of a background with the twitter logo.

Getty Images | SOPA Images

Elon Musk today said his deal to purchase Twitter is “temporarily on hold” while he awaits details on the number of spam and fake accounts on the site, but he later added that he remains “committed” to the acquisition.

“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5 percent of users,” Musk wrote in a tweet Monday morning. In a follow-up tweet two hours later, he wrote, “Still committed to acquisition.”

The first tweet saying that the deal is “on hold” included a link to a May 2 Reuters article noting that Twitter had “estimated in a filing… that false or spam accounts represented fewer than 5 percent of its monetizable daily active users during the first quarter.”

Twitter shares reportedly fell more than 20 percent in premarket trading after Musk’s initial tweet but gained much of that back after Musk said he’s still committed to the deal. Twitter shares were down about 8 percent in today’s trading as of this writing.

Musk could renegotiate price or back out

While Musk could back out of the Twitter deal and pay a $1 billion breakup fee, he could also renegotiate the price. The Wall Street Journal wrote today:

Mr. Musk might be using Twitter’s recent disclosure as a means to get out of or renegotiate the deal, said Daniel Ives, a technology analyst at Wedbush Securities. One reason is the impact on Tesla shares since the deal was announced.

“Leveraging his stock and potential sales of Tesla is a huge overhang on the stock,” Mr. Ives said.

Tesla shares “have fallen 29 percent over the past month through Thursday,” the WSJ report noted.

Musk has more fake followers than similar accounts

Musk has said his priorities as Twitter owner will include “defeating the spam bots and authenticating all humans.” SparkToro, which makes a “Fake Followers Audit” tool, says its research suggests that 5 to 30 percent of followers on Twitter are fake. That includes “bots, spam accounts, inactive users, propaganda, or other non-engaged/non-real users.”

The number of fake followers is generally much bigger for high-profile accounts such as Musk’s. Nearly 58 percent of Musk’s followers are fake, according to a check of his account using the SparkToro tool today. That amounts to nearly 53 million accounts following Musk “that are unreachable and will not see the account’s tweets (either because they’re spam, bots, propaganda, etc. or because they’re no longer active on Twitter).”

“Accounts with a similar sized following to @elonmusk have a median of 41 percent fake followers. This account has more fake followers than most,” SparkToro says.

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