Elon Musk calls off $44-billion deal to buy Twitter
In this photo illustration, Twitter account of Elon Musk is seen on a smartphone screen and Twitter logo in the background. (Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images)
Elon Musk won’t be buying Twitter after all, apparently. The Tesla and SpaceX CEO is calling off the $44-billion deal, accusing the company of "false and misleading representations."
The move was not a surprise to many based on Musk’s comments about the number of fake accounts on the social media platform. His team in recent weeks had tussled with Twitter over "spam bots" and threatened to walk away from the deal if the company couldn’t show that less than 5% of its daily active users are automated spam accounts.
In a letter sent to Twitter on Friday and filed with the SEC, Musk’s attorneys said Twitter had violated the terms of the deal.
"For nearly two months, Mr. Musk has sought the data and information necessary to ‘make an independent assessment of the prevalence of fake or spam accounts on Twitter’s platform,’" the letter said, in part. "Twitter has failed or refused to provide this information. Sometimes Twitter has ignored Mr. Musk’s requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr. Musk incomplete or unusable information."
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Musk has argued that Twitter significantly underestimated the number of spam bots on its service. Last month, Twitter offered Musk access to its "firehose" of raw data on hundreds of millions of daily tweets, according to multiple reports at the time, though neither the company nor Musk confirmed this.
The Twitter logo is seen outside their headquarters on April 26, 2022 in downtown San Francisco, California. (AMY OSBORNE/AFP via Getty Images)
Twitter said it removes 1 million spam accounts each day in a call with executives Thursday during a briefing that aimed to shed more light on the company's fake and bot accounts. Twitter said on the call that the spam accounts represent well below 5% of its active user base each quarter.
Private data, which isn't available publicly and thus not in the data "firehose" that was given to Musk, includes IP addresses, phone numbers and location. Twitter said such private data helps avoid misidentifying real accounts as spam.
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A comment from Twitter representatives was not immediately available.
Prior to the news, Twitter pointed FOX Business to a statement it made in early June, saying it would continue to cooperatively share information with Musk "to consummate the transaction in accordance with the terms of the merger agreement."
"We believe this agreement is in the best interest of all shareholders," Twitter said. "We intend to close the transaction and enforce the merger agreement at the agreed price and terms."
According to Friday's letter, Musk – without the full data he sought – believes Twitter's fake profiles account for "wildly" more than 5% of its total users.
"It appears that Twitter is dramatically understating the proportion of spam and false accounts represented in its [monetizable daily active users] count," the letter stated. "Preliminary analysis by Mr. Musk’s advisors of the information provided by Twitter to date causes Mr. Musk to strongly believe that the proportion of false and spam accounts included in the reported mDAU count is wildly higher than 5%."
Thursday, the Twitter account of the purported creator of Dogecoin responded to a post about Twitter supposedly removing more than 1 million spam accounts each day writing: "how many new real accounts does it have per day I wonder."
To that, Musk replied: "That is indeed the real question."
FOX Business reporter Bradford Betz and the Associated Press contributed to this report.