In this photo illustration, Elon Musk’s Twitter account can be seen on a smartphone screen and the Twitter logo in the background.
Pavlo Gonchar | Light rocket | Getty Images
Musk wants to buy Twitter for $44 billion, a mega acquisition with huge implications for the social media world — not least given the Tesla and SpaceX CEOs controversial position on content moderation and freedom of expression.
But the fate of the deal has become more uncertain in recent weeks after Musk threatened to run away, citing concerns about the number of fake accounts on the platform. The billionaire could face a $1 billion breakup fee and possibly even lawsuits if he left the deal.
Musk said at an event hosted by Bloomberg on Tuesday that there are a number of “unsolved issues” that must be resolved before he can move forward with the acquisition.
Musk makes no secret of his concerns about the number of fake accounts on Twitter. Attempts to manipulate social media platforms with fake accounts and bots aren’t exactly new, but Musk says he wants more clarity from Twitter about how many of its users are real.
Twitter’s public disclosures put the number of fake or spam accounts at less than 5% of its “moneyable” daily active users. Musk hesitates. On Tuesday, he said it’s “probably not most people’s experience using Twitter.”
“We are still waiting for a resolution on that matter, and that is a very important matter,” he said.
Last week, Twitter’s independent chairman, Bret Taylor, said the company’s management is “committed to the transaction on agreed terms.”
The second major roadblock facing the Twitter transaction, Musk says, is the portion of debt needed to fund it.
Musk promised to pay $33.5 billion in cash for the company in May. He has also received $7.1 billion in equity financing commitments from investors, including: Oracle co-founder Larry Ellison and the crypto exchange Binance.
Musk says the rest of the funding will come in the form of bank loans, but how exactly will this turn out? remains uncertain† Despite being the richest person in the world, much of Musk’s wealth is tied up in Tesla stock. He has sold and pledged billions in Tesla stock as collateral for the loans.
The final hurdle for Musk to finalize his acquisition is Twitter shareholder approval. Investors are expected to vote on the deal in late July or early August.
Whether Musk will receive sufficient support for the buyout remains unclear. Last month, some Twitter shareholders has sued Musk and the company itself about the chaotic handling of the process.
“Will the debt portion of the round come together? And then the shareholders vote in favour?” Musk said Tuesday.
These — along with the issue of fake accounts — are “the three things that need to be resolved before the transaction can be completed,” he said.