Twitter stocks plummet as Elon Musk intensifies dispute over spam accounts

The Tesla founder has warned that the acquisition deal will be on hold until the social media company proves that less than 5% of users are fake

Elon Musk, in an image from 2021.
Elon Musk, in an image from 2021.Matt Rourke (AP)

Twitter stocks fell on Monday as doubts built over whether Elon Musk will proceed with his plans to purchase the social media company. After an initial purchase of 9% of shares, the Tesla founder reached an agreement in April to buy Twitter for $54.2 a share, or $44 billion in total. But on Friday, he announced that the deal was on hold until Twitter could prove that less than 5% of users were fake accounts. The announcement caused Twitter stocks to plummet 10%, but the uncertainty has not ended there.

On Tuesday, Musk renewed his dispute over spam accounts, this time accusing Twitter CEO Parag Agrawal of refusing to provide information. “My offer [to buy Twitter] was based on Twitter’s SEC filings being accurate. Yesterday, Twitter’s CEO publicly refused to show proof of <5%. This deal cannot move forward until he does,” he warned in a message on Twitter.

Investors believe Musk is looking for an excuse to break the agreement, or at the very least, to negotiate a lower price for the social media company. The fact that the terms of the merger prohibit Musk from “disparaging” Twitter while the process is completed appears not to matter to the businessman. On Monday, Musk told a technology conference in Miami that he believes 20% of Twitter accounts are false, without explaining how he reached this number.

Parag Agrawal, in an image provided by Twitter.
Parag Agrawal, in an image provided by Twitter.AFP

Twitter meanwhile has said it is committed to the deal. In a long Twitter thread, Agrawal explained the difficulties involved with detecting fake accounts and how the company is working on the problem. In response to his detailed and technical explanation of the verification process, Musk replied: “Have you tried just calling them?”

The Tesla founder said on Saturday that he was going to do his own calculations based on a random sample of 100 users. But in his thread, Agrawal pointed out that Twitter is already studying thousands of users to estimate the number of spam accounts. He added: “Unfortunately, we don’t believe that this specific estimation can be performed externally, given the critical need to use both public and private information (which we can’t share).”

Twitter stocks dropped 8% on Monday to $37.39, falling below the $39.31 closing price on April 1, the last trading session before Musk revealed that he had bought a 9% stake in the company.


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