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Elon Musk’s Twitter deal reportedly in jeopardy over bot accounts

Justinas
Baltrusaitis
1 month ago
2 mins read

Tesla (NASDAQ: TSLA) CEO Elon Musk’s $44 billion deal to acquire social media platform Twitter (NYSE: TWTR) is reportedly in jeopardy over a controversy regarding its spam accounts.

Sources familiar with the matter noted that Musk believes data provided by Twitter regarding the number of bots on the platform is not verifiable, The Washington Post reported on July 7. 

The sources who sought anonymity stated that the Tesla boss has halted engaging in certain discussions like funding for the deal that was recently on the verge of concluding. 

Evaluating Twitter as a business 

In this line, Musk and his team allegedly opine that with the controversy around spam accounts, it is challenging to evaluate Twitter’s prospects as a business venture.

Another source stated that Twitter was not being cooperative in dealing with Musk, and the bot accounts were among the main issues under derailing the deal. Interestingly, since Musk announced the take over of Twitter, the company’s shares have plunged, raising concerns that he might be overpaying for the deal. 

It is worth noting that it might be challenging for Musk to exit the deal despite the discussions stalling. Musk, who also heads SpaceX, had committed to seeing the deal through unless something major happened on the Twitter business. 

The report notes that Musk can use courts to exit the deal but will need to pay about $1 billion in a breakup fee. 

Besides Musk, the deal is financed by Oracle’s (NYSE: ORCL) co-founder, Larry Ellison, venture capital firms Sequoia Capital and Andreessen Horowitz, crypto exchange Binance, and investment giant  Fidelity, among others. 

Ongoing bot accounts controversy 

In May, Musk announced that the deal was on hold until the company provided data on bot accounts. After the tussle, Twitter complied and shared the necessary data. 

According to Musk, he aims to make the platform more open, arguing that the content moderation practices infringed on free speech. 

Furthermore, Musk’s announcement to take over Twitter has destabilised the company, creating rifts and unease among employees and executives.

There is wide-scale fear that Musk might jeopardise measures to protect the platform. Some employees have already begun looking for a job, anticipating the deal will materialise. 

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Justinas Baltrusaitis
Author

Justin crafts insightful data-driven stories on finance, banking, and digital assets. His reports were cited by many influential outlets globally like Forbes, Financial Times, CNBC, Bloomberg, Business Insider, Nasdaq.com, Investing.com, Reuters, among others.

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