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Elon Musk has put the brakes on his $44 billion bid to buy Twitter, saying the site has too many fake accounts. But is the world’s richest man just hoping to negotiate a better deal?
LEILA FADEL, HOST:
Elon Musk has a deal to buy Twitter for $44 billion. But now, apparently, he has doubts. Such serious doubts, so he says, that he might kill the deal. Or maybe Elon Musk is being Elon Musk and trolling for a better bargain. And all of this is playing out, where else? – but on Twitter. I spoke with NPR tech correspondent Shannon Bond to understand what’s going on.
SHANNON BOND, BYLINE: Musk said at a conference in Miami on Monday that he’s concerned about the number of fake accounts on Twitter.
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ELON MUSK: You know, at the end of the day, acquiring – it has to be fixable, and fixable, you know, with reasonable time frame and without revenues collapsing along the way and all that sort of stuff. And so, you know, I really need to see how these things are being calculated.
BOND: But, you know, for years, Twitter has said it estimates less than 5% of accounts are fake. But on Tuesday, Musk demanded public proof of that number. Otherwise, he said, quote, “This deal cannot move forward.” Remember, he initiated this deal. Also, without providing any evidence, he claimed 20% of accounts may be fake. Then one of Musk’s followers tweeted that the Securities and Exchange Commission should look into this. Musk tweeted in response, hello @SECGov, anyone home? SECGov is the agency’s official account. And, Leila, that’s the same agency that, in 2018, fined Musk $20 million over his false claims on Twitter that he had funding to take Tesla private.
FADEL: OK, So is this a bluff to get a better deal, or is Musk trying to pull out?
BOND: Well, if he does walk away, he’d almost certainly be on the hook to pay Twitter a $1 billion breakup fee. And experts I’ve spoken with say Twitter could even maybe potentially sue him for further damages. Now, Musk is relying on his Tesla shares to finance this deals, and the price of those has fallen sharply. So many observers speculate Musk intends to renegotiate his price for Twitter. And at Monday’s conference, Musk suggested he might do just that.
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MUSK: In making the Twitter offer, I was obviously reliant upon the truth and accuracy of their public filings. And if those filings are not accurate, it’s simply not – that’s – it’s not – you can’t pay the same price for something that is much worse than they claimed.
BOND: But, Leila, Musk waived due diligence in doing this deal, and that’s like buying a home without doing an inspection.
FADEL: So what impact is the drama having on Twitter?
BOND: Well, its share price is way down, and there are worries it could tank even further if Musk backs out. And this is just adding to massive uncertainty and disruption for the company. Twitter has frozen hiring. It’s cutting spending. Several top executives are leaving. So whether Musk goes through with the deal or walks away, the whole process risks leaving Twitter weaker than it was before – damaged.
FADEL: OK. So to recap, a little over a month ago, Musk offered to buy Twitter. Twitter initially resisted, later accepted. Now Musk is the one with cold feet, right?
BOND: Yes, right. And Twitter says it’s still committed to getting this deal done at the price Musk agreed to. CEO Parag Agrawal tweeted a lengthy rebuttal to Musk’s criticism. Musk replied on Twitter with a poop emoji.
FADEL: NPR’s Shannon Bond, thank you so much.
BOND: Thanks, Leila.
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