Dispute over spam accounts may see Elon Musk drop his $44-billion offer to buy

Tesla head, Twitter going head to head over accounts

Tesla CEO Elon Musk says his deal to buy Twitter can’t move forward unless the company shows public proof that less than five per cent of the accounts on the social media platform are fake or spam.

Musk made the comment in a reply to another user on Twitter early Tuesday. He spent much of the previous day in a back-and-forth with Twitter CEO Parag Agrawal, who posted a series of tweets explaining his company’s effort to fight bots and how it has consistently estimated that less than five per cent of Twitter accounts are fake.

In his tweet Tuesday, Musk said that “20 per cent fake/spam accounts, while 4 times what Twitter claims, could be much higher. My offer was based on Twitter’s SEC filings being accurate.”

He added: “Yesterday, Twitter’s CEO publicly refused to show proof of 5 per cent. This deal cannot move forward until he does.” Twitter declined to comment. At a Miami technology conference Monday, Musk estimated that at least 20 per cent of Twitter’s 229 million accounts are spam bots, a percentage he said was at the low end of his assessment.

The battle over spam accounts kicked off last week when Musk tweeted that the Twitter deal was on hold pending confirmation of the company’s estimates that they make up less than five per cent of total users.

Also at the All In Summit, Musk gave the strongest hint yet that he would like to pay less for Twitter than the $44-billion (U.S.) offer he made last month.

Musk’s comments are likely to bolster theories from analysts that the billionaire either wants out of the deal or to buy the company at a cheaper price. His tweet Tuesday came in reply to one from a Tesla news site speculating that Musk “may be looking for a better Twitter deal as $44 billion seems too high.”

“Twitter shares will be under pressure this morning again as the chances of a deal ultimately getting done is not looking good now,” Wedbush Securities analyst Dan Ives, who covers both Twitter and Tesla, said in a research note. He estimated there’s “60 per cent-plus chance” Musk ends up walking away from the deal and paying the $1-billion breakup fee.

Musk made the offer to buy Twitter for $54.20 per share on April 14. Twitter shares have slid since then. They were down slightly in Tuesday morning trading to $37.28, closing at $38.32 in New York.