Musk: Twitter deal on hold pending investigation into spam, fake accounts

Elon Musk tweeted that his deal to buy and take over Twitter is “temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users.” In the Friday tweet, Musk linked a Reuters report from earlier this month. The report focused on a Twitter quarterly report that estimated false or spam accounts made up less than 5% of the company’s “monetizable daily active users (mDAU)” in the first quarter.

“Still committed to acquisition,” Musk said in a reply to his Friday tweet.

Musk has been vocal about his desire to clean up Twitter’s problem with “spam bots” that mimic real people. He has appeared to question whether the company was underreporting them. In its quarterly filing with the SEC, even Twitter doubted that its count of bot accounts was correct, conceding that the estimate may be low.

“In making this determination, we applied significant judgment, so our estimation of false or spam accounts may not accurately represent the actual number of such accounts, and the actual number of false or spam accounts could be higher than we have estimated,” the filing says. “We are continually seeking to improve
our ability to estimate the total number of spam accounts and eliminate them from the calculation of our mDAU, and have made improvements in our spam detection capabilities that have resulted in the suspension of a large number of spam, malicious automation, and fake accounts.”

Stock in both Twitter and Tesla swung sharply in opposite directions Friday, with Twitter’s stock falling nearly 6% and Tesla shares jumping nearly 7% in trading before the opening bell. Musk had proposed using Tesla shares to help fund the Twitter deal.

Wedbush analyst Dan Ives said Musk’s “bizarre” tweet about spam accounts will lead Wall Street to think the deal is likely falling apart, Musk is attempting to negotiate a lower deal price, or he is simply walking away from the deal.

“Many will view this as Musk using this Twitter filing/spam accounts as a way to get out of this deal in a vastly changing market,” Ives wrote.

The Associated Press contributed to this report.