After an unlimited number of discussions, news articles, and media coverage — the Elon Musk buying Twitter saga has reached its end as Musk terminates the deal. About 2 months ago Elon Musk had put the $44 billion acquisition of Twitter on hold due to the social media giant’s reporting on fake/bot/spam accounts.
The Twitter team said that the ratio of bot and fake accounts on the platform is not more than 5% but Elon Musk wasn’t convinced and wanted a further investigation to attest to their analysis. However, after about 2 months into the investigations, Twitter was not able to convince Musk on this matter.
“On July 8, 2022, the Reporting Person’s advisors sent a letter to Twitter (on the Reporting Person’s behalf) formally notifying Twitter that the Reporting Person is terminating their merger agreement,” an SEC filing by Twitter disclosed the termination of the deal by Elon Musk on Friday (PDF below).
“Twitter has failed or refused to provide this information. Sometimes Twitter has ignored Mr. Musk’s requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr. Musk incomplete or unusable information,” Elon Musk’s letter to Twitter stated via Associated Press.
Elon Musk’s stance on fake/bot accounts on Twitter is more than 5% has been pretty firm during the past few months. A 2021 study by a group of computer scientists and researchers from Japan published a paper that concludes that the number of bot and fake accounts on Twitter is somewhere between 8% and 18%.
This research by the Japanese computer science experts derived the results based on data, algorithms, and mathematical formulas.
We found that all three estimates converge to ≈ 0.08 when we set θ = 0.95 and to ≈ 0.18 when we set θ = 0.90, illustrating the robustness of the proposed estimator with respect to the initial user. Our estimate of between 8% and 18% is sufficiently consistent with Varol et al.’s estimate of 9% to 15% as of 2015 [9] and Luceri et al.’s estimate of 12.6% as of 2019.
Source: IEEE Research.
However, Musk’s refusal of acquiring Twitter for $44 billion ($54.20 per share) is going to start one of the most fascinating legal battles in the history of Silicon Valley. Twitter’s Board Chair Bret Taylor has already signaled that the company will pursue legal action against Elon Musk.
“The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plans to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery,” Bret Taylor tweeted yesterday.
The flipside of the Musk-Twitter saga is how this deal has benefitted Elon Musk in the long term. In less than 2 months since he first bought a 9.2% stake in Twitter, Elon Musk gained more than 20 million new followers on the social media platform, this allowed more people around the globe to get to know Musk a little more.
Not just that, through his massive Twitter account, Elon Musk constantly educates the world about his companies and their mission. Tesla has the mission of sustainable transportation and energy, and SpaceX is trying to expand human life to other planets.
This is how he will get more and more people excited about what he thinks is right for the survival of humanity in the clouded future.
And through massive coverage in all online and traditional media of the Twitter deal in the last few months, he has saved hundreds of millions of dollars in Tesla marketing. It was like the Super Bowl effect — where there is Musk, there is Tesla — and more sales and marketing.
So if he even pays the $1 billion agreement breakup fee, he is not at a total loss — and with a current $227 billion net worth, it does not put a dent in his massive wealth.
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