Twitter stocks plunge amid legal fight with Musk over acquisition
Musk had said that he was abandoning his $44 billion bid for the company and the social media platform
In the tight legal fight looming between Tesla CEO Elon Musk and Twitter, the social media organisation has become the prime casualty its stocks plunging with investor sentiments turning bearish.
Musk had said that he was abandoning his $44 billion bid for the company and the social media platform.
The sell-off in Twitter shares pushed the share price below $32, far from the $54.20 that Musk agreed to pay for the company. That suggests Wall Street has very serious doubts that the deal will go forward.
In his latest SEC filing, Musk said he has sought the data and information necessary to "make an independent assessment of the prevalence of fake or spam accounts on Twitter's platform". "Twitter has failed or refused to provide this information," the filing claimed.
Musk's lawyer also alleged that Twitter broke the agreement when it fired its revenue product leader and general manager of consumers and laid off a third of its talent-acquisition team.
The sale agreement, he wrote, required Twitter to "seek and obtain consent" if it deviated from conducting normal business. Twitter was required to "preserve substantially intact the material components of its current business organisation", the letter said.
Last month, Twitter had offered billionaire Elon Musk full access to its firehose of raw data on hundreds of millions of daily tweets.
The problem of fake accounts is well-known to Twitter and its investors.
The company has disclosed its bot estimates to the US Securities and Exchange Commission for years, while also cautioning that its estimate might be too low.
On Thursday, Twitter sought to shed more light on how it counts spam accounts in a briefing with journalists and company executives.
Twitter said it removes 1 million spam accounts each day. The accounts represent well below 5 per cent of its active user base each quarter.
To calculate how many accounts are malicious spam, Twitter said it reviews "thousands of accounts" sampled at random, using both public and private data such as IP addresses, phone numbers, geolocation and how the account behaves when it is active, to determine whether an account is real.