Twitter has offered billionaire Elon Musk full access to its firehose of raw data on hundreds of millions of daily tweets, with the Tesla CEO threatening to pull out of the $44 billion social media platform acquisition, The Washington Post reported.
Twitter's reported offer could blunt Musk's attempts to use the spam bot issue to cast doubt on the deal's future. Fake social media accounts have been problematic for years. Advertisers rely on the number of users provided by social media platforms to determine where they will spend money. Spam bots are also used to amplify messages and spread disinformation.
The problem of fake accounts is well-known to Twitter and its investors. The company has disclosed its bot estimates to the US Securities and Exchange Commission for years, while also cautioning that its estimate might be too low.
Twitter CEO Parag Agrawal has said that Twitter has consistently estimated that fewer than five per cent of its accounts are spam. But Musk has disputed that figure, contending in a May that 20 per cent or more of Twitter's accounts are bogus.
Musk, on April 29 sold roughly $8.5 billion worth of shares in Tesla to help fund the purchase of Twitter. Musk, on May 13, said that his plan to buy Twitter is temporarily on hold. He said that he needs to pinpoint the number of spam and fake accounts on the social media platform. Shares of Twitter tumble, while shares of Tesla rebound sharply.
According to the letter by Tesla's lawyers, this is a clear material breach of Twitter's obligations under the merger agreement and Musk reserves all rights resulting therefrom, including his right not to consummate the transaction and his right to terminate the merger agreement.
While Twitter remains unmoved at the initial price of $54.2 per share, the stock has fallen by over 25 per cent since early May. Tesla’s stock price has fallen dramatically by 35 per cent since April 4, the day Musk disclosed that he was Twitter’s largest stakeholder, cutting deeply into Musk's wealth --these could be reasons Musk is being mercurial regarding the Twitter deal.
If Musk chooses to walk away, Twitter could sue him to force him to complete the acquisition on agreed terms. And while Musk waived his rights to look into the company, the agreement allows Musk to get out of the deal if Twitter causes a “material adverse effect.”
