You gotta be rooting for Elon Musk when he goes nose to nose with those Twitter commies. He’ll outplay them again and again. He didn’t get to be the richest guy in the world for nothing. Liz Peek tells the story.
— New York Post (@nypost) July 11, 2022
Peek: Elon Musk wants out of his deal to buy Twitter. The world’s richest man claims that Twitter’s management is in “material breach” of various provisions in the purchase agreement and that the company has made “false and misleading representations” about its business. Management denies Musk’s complaints.
Musk wants to know how many active daily users on Twitter are actually “bots” – or fake accounts. He says management refuses to turn over information that could accurately determine the number. Since 90% of the firm’s revenues come from advertising, the information is critical to advertisers, and to valuing the company.
Management says only 5% of its ADU (average daily users) are spam, and claims it kicks one million bots off the site each day; as recently as May, CEO Parag Agrawal claimed the number of fake accounts ejected was half a million. The lack of consistency is not reassuring. Who is telling the truth? My bet is on Musk.
After all, who has more to lose? If Twitter’s management is found to have fudged its numbers, heads will roll and the stock will collapse. If Musk’s charges turns out to be a phony excuse to bow out of an overpriced deal, the billionaire’s reputation will take a hit, for sure. But the brilliant Tesla and SpaceX founder is already considered erratic; few will be surprised by his about-face. Yes, there is that pesky billion-dollar fee that either side may owe for torching the transaction; Musk can afford it.
Make no mistake. When, on April 25, Elon Musk agreed to pay $44 billion for a social media company even in the midst of a giant sell-off of tech stocks, it was a risky bet. The $54.20 per share offer constituted a hefty 38% premium over the stock price prior to Musk divulging his significant ownership position – too much in hindsight. Nonetheless, Musk had a vision and was willing to roll the dice.
Our country will be divided over the merits of Musk’s claims. Liberals will judge Musk to be welching on a reckless and overpriced bid for the social media giant. Conservatives will believe Musk. After all, they have distrusted the social media firm for years, for good reason.
Ultimately, the dispute will probably be hashed out in court. But there is a lot on the line – not just for Musk and for Twitter shareholders, but also for the millions of Americans hopeful that Musk would indeed create, as he pledged to do, a “virtual town square” where all voices would be welcome. A promise that terrifies liberals accustomed to shutting down divergent views – “misinformation” — on climate change or COVID-19, for instance…
This battle is far from over. It is possible that Musk will attempt to negotiate a lower price for Twitter. If management is not being truthful about the number of real people active on its site, it will likely embrace another go at a deal. Either way, the millions hoping for an open and honest social media platform may have to wait a while longer.