Musk says a Twitter deal at a lower price is "not out of the question"

In April Elon Musk made a bid to acquire Twitter at $54.20 a share (valuing the company at $44 billion). However, the deal has now been put on hold after Musk has expressed doubt that the proportion of spam/fake accounts is less than 5% as Twitter claims. “This deal cannot move forward” until Twitter shows proof for the sub-5% number, tweeted Musk.

Musk claims that the original deal was made based on Twitter’s SEC filings, which state that the fake accounts make up 5% or less of the active user base. However, if that proportion is higher, it will impact the company’s bottom line.

20% fake/spam accounts, while 4 times what Twitter claims, could be *much* higher.

My offer was based on Twitter’s SEC filings being accurate.

Yesterday, Twitter’s CEO publicly refused to show proof of <5%.

This deal cannot move forward until he does.

— Elon Musk (@elonmusk) May 17, 2022

“You can't pay the same price for something that is much worse than they claimed,” said Musk at an All-In Summit 2022 conference in Miami, suggesting that he may ask for a price cut if Twitter can’t prove its numbers to his satisfaction.

Musk believes that at least 20% of Twitter users are fake and alleged that Twitter’s CEO refused to show proof for the 5% estimate. As a response, CEO Parag Agrawal posted a lengthy thread explaining how the estimate was calculated.

“Unfortunately, we don’t believe that this specific estimation can be performed externally, given the critical need to use both public and private information (which we can’t share). Externally, it’s not even possible to know which accounts are counted as mDAUs on any given day,” writes the CEO.

Twitter meanwhile maintains that it is committed to closing the deal at the agreed $54.20 per share price.

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