Twitter slips on report that Musk deal is in jeopardy
The deal was already in uncertain territory since Musk had demanded more information on the percentage of spam accounts on the platform.
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NEW YORK, NEW YORK - MAY 02: Elon Musk attends The 2022 Met Gala Celebrating "In America: An Anthology of Fashion" at The Metropolitan Museum of Art on May 02, 2022 in New York City. (Photo by Theo Wargo/WireImage)
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Shares of Twitter fell about 4% after the markets closed on Thursday following a report from The Washington Post that said billionaire Elon Musk's deal to buy the company is in jeopardy.
The deal was already in uncertain territory, according to Musk, after he demanded more information on the percentage of spam accounts on the platform. But the Post, citing one unnamed source, said Musk's team has stopped engaging in some funding discussions for the $44 billion deal. Musk's team has determined it can't verify Twitter's spam account figures and they are now prepared to soon make "a change in direction," the Post reported, citing a source.
Musk can't just pay the $1 billion breakup fee and walk away. Twitter could try to hold Musk to the original terms by claiming his reasons for backing out aren't related to its core business.
Twitter held a virtual briefing with reporters earlier on Thursday to explain how it determines which of the accounts on its platform are bots or spam accounts. The company said trained workers use internal data and signals to come up with the figure that less than 5% of its monetizable daily active users (mDAUs) each quarter are spam accounts.
A Twitter spokesperson pointed to an earlier statement that the company "has and will continue to cooperatively share information with Mr. 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. We intend to close the transaction and enforce the merger agreement at the agreed price and terms."
Musk did not immediately respond to a request for comment on the report.
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