Elon Musk is lost and Twitter shareholders are losing their money. The investor, who made a deal to buy the social network, torpedoes the company. After provoking the case by saying last week he would suspend his bid, he himself got into a heated argument with Twitter’s still boss, Parag Agrawal, on the social network this Monday. The stock, meanwhile, has continued to fall and is already trading below where Musk announced he’d bought a more than 9% stake. The investor has indicated that it has considered lowering its offer, saying it is not “out of the question”.
Investors believe Musk is looking for an excuse to tear up his deal, or at least renegotiate the purchase of Twitter. The richest man in the world offered $54.20 a share before the stock market had suffered the plunge of the past few weeks. It was probably an untimely offer. And now he wants to fix it. This Monday made it clear that the possibility of a price lower than the agreed $44,000 million is not off the table. And stocks have accelerated their decline.
It appears to have been useless for Musk to sign a deal that would avoid discrediting the company while operations were shut down. The investor doubted that the calculation of up to 5% false profiles was correct and this appears to be the way to justify wanting to break what was signed. At a tech conference in Miami this Monday, Musk stated that he believes 20% of accounts are spam, without justifying those calculations.
Parag Agrawal, in an image provided by Twitter.-(AFP)
The Twitter boss opened up a lengthy thread about the difficulties in detecting fake accounts and the work the company is doing to help. And how do you get that estimate that they’re actually less than 5% as the company announced. Musk responded to a technical, didactic, and detailed justification with the smiley poop emoticon. Responding to another message from Agrawal about the verification trails, Musk said, “Have you tried calling her?”
Musk had said over the weekend that he would do his own (unscientific) calculation by randomly picking 100 beads. He added that he chose this sample size because it was the same as that used by Twitter. Agrawal contradicted that claim on Monday, saying Twitter has people checking “thousands of accounts” to identify the bots, but stressed he couldn’t share more details due to privacy concerns. “Unfortunately, we don’t think this specific estimation can be done externally given the imperative to use both public and private information,” Agrawal said on Twitter, adding that the company recently shared this method with Musk.
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Let’s talk spam. And let’s do this with the benefit of data, facts and context…
— Parag Agrawal (@paraga) May 16, 2022
In his thread, Agrawal explains that quantifying fake profiles is difficult because some accounts that look like spam are actually real people and vice versa. Twitter also allows bots on the service, so simply creating an automated account isn’t against the rules.
After falling more than 10% on Friday when Musk shelved his offer and then said he was determined to buy the company, the stock fell another 8% on Monday. The shares have reached a minimum of EUR 37.33 during the trading session.
Musk’s asking price of $54.20 per share is 45% above that number, but at this point nobody seems to trust Musk to pay it. In fact, the price is at its lowest level since March 21 and is already trading below the April 1 price ($39.31), the session prior to the announcement that Musk had bought 9% of the company’s equity was.