Musk has been requesting information since May 9, a month after he made his first attempt to buy the company
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(Image: Mazic News)
Elon Musk has threatened to abandon his $44 billion bid to buy Twitter, claiming the company refused to give him details about its spam bot accounts.
In a letter dated Monday, June 6, included in a Twitter filing with the Securities and Exchange Commission in the United States, attorneys for Tesla and SpaceX CEO Elon Musk warned of this.
According to the letter, Musk has been requesting the information since May 9, a month after he first submitted his bid to buy the company, to determine how many of the company’s 229 million accounts are fake.
Musk’s purchase was “temporarily” put on hold last month due to the company’s spam user calculations.
“Twitter deal on hold pending details supporting calculation that spam/fake accounts actually represent less than 5% of users,” Musk tweeted at the time.
His tweet included a link to a report earlier this month that said spam and fake accounts make up less than 5% of daily Twitter users.
Here’s everything you need to know about it.
How much did Musk pay to buy Twitter?
In April, just days after it was announced that Tesla and SpaceX CEO Elon Musk had bought a 9% stake in Twitter, the billionaire offered to buy the social media platform outright.
Funding comes from Morgan Stanley and other financial institutions – other banks involved include Barclays, Bank of America, Societe Generale, Mizuho Bank, BNP Paribas and MUFG.
Morgan Stanley is one of Twitter’s largest shareholders, behind the Vanguard Group and Musk.
Musk said $13 billion ($10 billion) in equity was from him “directly or indirectly,” though he didn’t say where those funds came from.
According to Forbes, Musk is the richest man in the world with a fortune of almost $279 billion (£214 billion).
But Musk’s actions since buying a 9 percent stake in Twitter have also been described by one expert as evidence he shouldn’t be given control of the company.
Mike Rhodes, managing director of mobile marketing company ConsultMyApp, said: “It would be just plain ridiculous for Twitter to accept this offer and put itself in the hands of someone who has proven their sporadic nature over the past two weeks.”
Why does Musk want to buy Twitter?
In April, alongside announcing that Musk had bought a 9% stake in Twitter, it was also announced that he would be joining the board.
But just days later, Twitter boss Parag Agrawal confirmed Musk had changed his mind.
In a statement released after confirming his accepted offer, Musk said, “Freedom of expression is the bedrock of a functioning democracy, and Twitter is the digital marketplace where matters important to the future of humanity are debated.”
“Twitter has tremendous potential – I look forward to working with the company and the user community to unlock it.”
Who used to own Twitter?
There are many shareholders in Twitter Inc., so no single person owns the entire company.
It is a “public” company because its shares are available for anyone to buy on the stock exchange, while it would be a “private” company if owned by just a few individuals or groups.
According to the Wall Street Journal, the group with the largest stake is the Vanguard Group, an American investment firm that is among the largest in the world.
As of April 15, the Vanguard Group is believed to own 82.4 million shares of the company, or 10.3% of the company.
Musk is the company’s second-largest shareholder. With 73.5 million shares, he owns 9.2% of Twitter Inc.
The remaining shares are held by various financial institutions, including Morgan Stanley and BlackRock Inc.
What will Elon Musk’s Twitter look like?
Known for his belief in absolute freedom of speech, Musk has indicated that he doesn’t believe Twitter is living up to his principles on the matter.
But a change in Twitter’s policy, prompted by Musk, to relax language rules on the site could pose further problems for the company in an age of increasingly polarized online discourse.
In his statement, he said: “I [also] We want to make Twitter better than ever by expanding the product with new features that open source algorithms to increase trust, defeat spam bots and authenticate everyone.”
One expert said that Musk’s own history of tweeting could get in the way of the delicate balancing act of content moderation that Twitter is currently engaged in.
“Sowing the seeds to promote ‘free speech’ is one thing, but let’s not forget that Elon’s view of simply speaking out has historically been viewed as reckless by regulators,” said Dan Lane, Sr Analyst at investment and stock trading app Freetrade.
Musk previously ran into trouble with US regulators the Securities and Exchange Commission (SEC) over his own tweets after he was accused of violating trading rules when he tweeted about his business interests.
He has also been accused of tweeting misinformation about Covid-19 after posting in March 2020 that children are “essentially immune” to the disease.
Musk’s stance on free speech is shared by the likes of Donald Trump and a number of other right-wing politicians whose accounts have been banned for violating Twitter’s content rules but who claim to have been the victim of censorship.
Some believe a Musk acquisition could mean a return to the platform for Trump and others, but reintroducing those users would be a highly controversial move and could subject the company and its approach to moderation to further scrutiny.
Infamously, British caver Vernon Unsworth sued the Tesla co-founder after calling him “pedo guy” and “sus” (suspicious) on Twitter after the cave rescue in Thailand in July 2018.
Unsworth lost the case after Musk’s attorneys argued it was nothing more than a playground insult and not an allegation of pedophilia, which a jury agreed to.