Twitter Elon Musk Buyout Put ‘On Hold’

Source: Brett Jordan on Unsplash

The $44 billion Twitter buyout has now been put on hold. Tesla CEO and business magnate, Elon Musk tweeted the message today, citing the need for supporting details on the social network’s calculation of spam/fake accounts. The decision apparently stemmed from a report by Reuters that Twitter’s fake accounts represented less than 5% of its users. No other details were provided as to why Musk might back out of the deal because of the new disclosure. However, a follow-up tweet did say that he is still committed to the acquisition.

After announcing his acquisition of Twitter on April 25, the SpaceX founder, CEO, and Chief Engineer also made public his plans for the microblogging site once the takeover is completed. One of those is to make Twitter open source, which we compared to other open-source SaaS success stories. Musk also proposed the idea of cracking down on “spam and scam bots” and “bot armies,” and prioritizing free speech.

“I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spambots, and authenticating all humans. Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it,” Musk stated in a press release reporting the buyout.

The free speech aspect also sent some anxious chills to advertisers who were concerned about possible changes to Twitter’s moderation policies that could lead to more hateful and violent speech and bullying on the platform. The last thing that businesses want is for their brand to be promoted alongside hateful and divisive content. Just this week, Musk said that he would lift the permanent ban on former President Donald Trump once he completes the deal. He had previously called the ban “a morally bad decision, to be clear, and foolish in the extreme.”

Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of usershttps://t.co/Y2t0QMuuyn

— Elon Musk (@elonmusk) May 13, 2022

As for this sudden turn of events, the Reuters report pointed to the federal filing Twitter made after the company finalized its deal with Musk. It stated that among the 229 million Twitter users who saw ads in the first quarter of 2022, the fake accounts were less than 5%. The statement on Twitter’s filing though was also quick to clarify that their estimation might not be accurate and that the real number “could be higher than we have estimated.” This uncertainty around the numbers seemed to have triggered Musk’s decision to put the deal on hold until more sufficient data can be obtained from Twitter.

This is not the first time Twitter admitted to issues surrounding its business stats and accounts. The company has previous cases of overstating or overcounting its daily users—in fact, it did so for three years straight. And the overcount was not mere hundreds or thousands but reached between 1 million to 2 million users over that three year period.

Based on current data released, Twitter now has 229 million daily users. Due to the pending acquisition though, the platform also said that it will stop issuing any operational or financial highlights. As stated in the company’s official statement, “Given the pending acquisition of Twitter by Elon Musk, we will not be providing any forward-looking guidance, and are withdrawing all previously provided goals and outlook.”