- Elon Musk continues to take issue with fake accounts on Twitter (NYSE:TWTR)
- Analysts are speculating that Musk is trying to publicly negotiate a lower price for the social media company
- TWTR stock continues to fall on the uncertainty, down 22% in the past five trading sessions
The battle for Twitter (NYSE:TWTR) continues.
In the past 24 hours, billionaire Elon Musk has raised the stakes regarding his proposed $44 billion offer to buy the social media company. He last said that the deal “cannot move forward” without a clear answer on whether fake accounts make up less than 5% of current users on the platform.
The ongoing drama has furthered speculation that Musk, who is also the CEO of Tesla (NASDAQ:TSLA), is trying to lower the price he pays for Twitter.
Meanwhile, Twitter shareholders continue to take it on the chin as the uncertainty surrounding a potential takeover pushes the price of TWTR stock lower. The share price has now fallen 22% in the past five days and is down a further 2% today.
What Happened With TWTR Stock
In a series of tweets, Musk has continued to take issue with the number of fake accounts on Twitter that are potentially controlled by bots, posting:
20% fake/spam accounts, while 4 times what Twitter claims, could be *much* higher.
My offer 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.
— Elon Musk (@elonmusk) May 17, 2022
Musk then seemed to double down on the bot issue at a technology conference in Miami, Florida. At a presentation he said “Currently what I’m being told is that there’s just no way to know the number of bots. It’s like, as unknowable as the human soul.”
For its part, Twitter issued a statement yesterday reiterating that the social media company is “committed to completing the transaction on the agreed price and terms as promptly as practicable.”
Twitter has previously said in regulatory filings that bots and fake accounts comprise approximately 5% of the users on its platform. Musk is now saying that the number has been grossly understated and bots could make up 20% of Twitter accounts.
Why It Matters
With TWTR stock down sharply in recent days, and TSLA stock down 30% year to date, analysts are speculating that Musk is taking issue with the bots on the social media platform in an effort to lower the price he ultimately pays to acquire Twitter.
Wedbush analyst Dan Ives said in media interviews that Musk is likely trying to negotiate a better price for Twitter than the $44 billion he has agreed to pay. Ives also said there is a 50%-60% chance that Musk eventually walks away from the proposed deal.
“If a revised deal does get done by Musk and Twitter, it will likely will be at a much lower price once negotiations take over and the diligence happens around Twitter DAU and algorithms hot button issues,” said Ives in an interview with Bloomberg Markets.
Musk himself seemed to confirm as much, saying late yesterday that a deal to buy Twitter at a lower price wasn’t “out of the question.”
What’s Next for the Twitter Takeover
The drama surrounding Musk’s potential purchase of Twitter shows no signs of ending anytime soon. And the uncertainty surrounding an acquisition continues to push TWTR stock lower. Until investors get clarity, they should be prepared for ongoing volatility.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.