One thing Elon Musk has made a point of in his time dealing with Twitter is the issue regarding bots on the social media platform. Ever since he put in his takeover bid for Twitter, he has stressed to the public that he wants to make Twitter bot-free because it helps the company make financial decisions regarding advertisements. Knowing the exact number of real users, you have is particularly important, and Musk has made it the prime goal to the point where the Twitter deal is now in question.
Musk requested Twitter to provide him data so that he could determine the number of real users on the platform, but Twitter hasn’t provided it yet. As a result, Musk has threatened to terminate the deal altogether, a big step forward from the small hurdle status it was in the last few weeks. Twitter, in its SEC filings, says that false accounts make up for less than 5 percent of its active users, but Musk argues that it’s at least 20 percent of accounts that are bots, showing a wide discrepancy between their estimates.
This whole fiasco has caused Twitter’s share price to fall by more than 25 percent, with this specific news causing a 5 percent pullback on Monday. It’s important to note that both sides made an agreement of paying the other $1 billion if a breakup were to happen on one end, with Twitter having the option to sue Musk. For someone with Musk’s follower count, bots prove to be an outlier as they make up for 70 percent of his followers, so he deals with this issue head-on when using the platform. One day, it feels like the deal is set and done, and another day it seems to collapse. Twitter’s share price will definitely stay volatile throughout this process, and it could become really bad if Musk were to back out.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.