Elon Musk has threatened to pull out of a $ 44 billion deal for Twitter, saying the company has refused to give him information about its fake accounts.
So Twitter now plans to give Mr. Musk access to a large swath of its data, potentially down to its very last tweet.
The social media company has agreed to allow Mr. Musk direct access to its “firehose,” the stream of millions of tweets that flow through the company’s network on a daily basis, according to a person with knowledge of the decision. Whether Mr. Musk will get full or partial access to that “firehose” is unclear.
The information would give Mr. Musk the tools to discern how many accounts on Twitter’s platform may be fake. But it isn’t likely to help him reach Twitter’s conclusion that 5 percent of its active accounts are fake, since the company uses a different methodology involving proprietary data and human analysis to get to that figure. Mr. Musk has said he doesn’t believe that just 5 percent of Twitter’s active accounts are fake.
Twitter’s move may make it more difficult for Mr. Musk to terminate the deal. On Monday, his lawyers sent a letter to the company, accusing it of stonewalling his efforts to obtain information that was essential to closing the acquisition. For weeks, Mr. Musk has also tweeted increasingly barbed comments about Twitter’s fake accounts, appearing to lay the groundwork to renegotiate or get out of the deal.
Mr. Musk agreed to buy Twitter in April for $ 54.20 a share. If the deal falls apart, there is a $ 1 billion breakup fee. But the agreement includes a “specific performance clause,” which gives Twitter the right to sue him and force him to complete or pay for the deal, so long as the debt financing he has corralled remains intact.
A Twitter spokesman declined to comment on giving Mr. Musk access to the stream of tweets, but referred to a previous statement.
“Twitter has and will continue to cooperatively share information with Mr. Musk to consummate the transaction in accordance with the terms of the merger agreement, ”Twitter has said. “We believe this agreement is in the best interest of all shareholders. We intend to close the transaction and enforce the merger agreement at the agreed price and terms. “
Mr. Musk did not respond to a request for comment. The Washington Post earlier reported that Mr. Musk got access to the Twitter firehose.
A company often shares confidential data with its acquirer, with the parameters around data sharing negotiated before signing any deal. But Mr. Musk waived due diligence when he agreed to buy the social media company, and Twitter began sharing confidential information with him last month.
One of Twitter’s concerns with sharing information has been Mr. Musk’s prior statements, both publicly and to the company, that he was considering starting a rival social media service, The New York Times has reported. Typically, such matters are addressed by limiting who would have access to such information.
Mr. Musk said in his letter this week that he would ensure that a nondisclosure agreement bound anyone reviewing confidential data provided by Twitter. He has also said he would not retain or share sensitive information about Twitter if the deal fell apart.
Once Mr. Musk receives access to Twitter’s stream of tweets, he is likely to need a team of experts to analyze the data, as well as the computing capacity to process and store the enormous volume of information, company insiders said.
How Elon Musk’s Twitter Deal Unfolded
A blockbuster deal. Elon Musk, the world’s wealthiest man, capped what seemed like an improbable attempt by the famously mercurial billionaire to buy Twitter for roughly $ 44 billion. Here’s how the deal unfolded:
While the information would offer Mr. Musk insight into Twitter’s number of fake accounts, it would also give him data necessary for planning the business should the acquisition close. Mr. Musk has told investors that he wants to reduce Twitter’s reliance on advertising revenue and introduce a new payments business.
For years, Twitter calculated its number of users the way many of its peers do, by reporting the number of people who actively use the service on a monthly basis. But in 2019, the company switched to what it said was a more accurate metric to gauge the health of the business: “monetizeable daily active users” – the number of people who are active on the site every day and can be used to generate advertising. revenue.
As of April, Twitter reported that it had 229 million monetizeable daily active users. Of those, Twitter has estimated that 5 percent are fake.
On Monday, Ken Paxton, the attorney general of Texas, also said he was opening an investigation into fake accounts on Twitter and how they affect citizens in the state. Strategists saw the move as a politically expedient way to align with Mr. Musk. Tesla, Mr. Musk’s electric automobile business, has its headquarters in Austin, Texas. Mr. Musk has also relocated to Texas from California, and his SpaceX rocket company has a site in the state.