Twitter chief executive Parag Agrawal defends company’s estimates of fake accounts as Elon Musk says renegotiating deal not ‘out of the question’
Twitter chief executive Parag Agrawal has defended Twitter’s estimate of the number of automated bots on the service, as the future of Elon Musk’s takeover bid for the company appeared to be in limbo.
Musk responded to Agrawal’s series of detailed Twitter posts on the issue with a poo emoji, later repeating his doubts about the issue.
Comments made at a tech conference indicated Musk may be looking for a lower price for the deal or to back out, Industry watchers said.
Misk told the All-In Summit in Miami that renegotiating the $44 billion (£36bn), $54.20 per share deal wouldn’t be “out of the question”, Bloomberg reported.
“I’m still waiting for some sort of logical explanation for the number of sort of fake or spam accounts on Twitter. And Twitter is refusing to tell us. This seems like a strange thing,” Musk said at the conference, the Financial Times reported.
He said Twitter’s claims that bots make up less than 5 percent of its user base might be a “material adverse misstatement”, a term that can be cited when companies want to reprice or scrap deals.
The deal includes a $1bn break fee if Musk decides not to proceed.
Agrawal defended Twitter’s claims, made repeatedly over the years in its quarterly earnings statements, saying he would discuss the issue “with the benefit of data, facts, and context”.
He said the company uses a combination of public and private data to identify bots and that accounts that appear fake may actually be operated by real people.
Agrawal said the firm had shared an “overview” of the process with Musk last week.
“We… look forward to continuing the conversation with him, and all of you,” he added.
— Elon Musk (@elonmusk) May 16, 2022
Meanwhile Twitter shares have fallen below $38 amidst broader market turmoil, below the price before Musk revealed his interest in a buyout.
Wedbush Securities analyst Dan Ives said a major drop in the price of Tesla shares – which were critical to Musk financing the deal – may have caused Musk to look for an exit strategy, adding that the bot issue feels like an “excuse”.
But he said the situation is also a “quagmire” for the Twitter board, which is under pressure to see the deal through.
“The Twitter Board is caught in a quagmire as if they do not accept a lower price…for the deal and Musk does actually walk then the stock would likely see a sub $30 level… in this shaky market,” Ives wrote on Twitter.
“Could end up in courts too,” he added.