Elon Musk cautioned there are a number of issues to iron out before he can complete his $44 billion takeover of Twitter Inc., including getting an accurate measure of bots on the social media platform and completing financing for the deal.
The proportion of fake, spam and bot accounts on the service is “still a very significant matter,” Musk said in an interview with Bloomberg News Editor-in-Chief John Micklethwait at the Qatar Economic Forum in Doha. “And of course there is the question of, will the debt portion of the round come together, and then will the shareholders vote in favor.”
Musk, after cutting a deal to acquire Twitter for $54.20 per share in April, has repeatedly questioned its disclosures about fake accounts, fueling speculation he wants to cut the price of the deal or walk away completely. His lawyer has said Twitter must cooperate by providing the data requested so that Musk can secure the debt financing necessary to consummate the deal.
Banks have committed to provide $13 billion of debt financing to back Musk’s acquisition. The lenders include Morgan Stanley, Bank of America Corp. and Barclays Plc.
The 50-year-old entrepreneur did make clear during the forum he’s thinking about how to improve the service. He said he would take responsibility for “driving the product” at Twitter, as he does at Tesla Inc. and Space Exploration Technologies Corp., though he doesn’t necessarily plan to be the chief executive officer.
“Ideally, I’d like to get like 80% of North America and perhaps, I don’t know, half the world or something ultimately on Twitter in one form or another,” he said. “And that means it must be something that is appealing to people. It obviously cannot be a place where they feel uncomfortable or harassed or they’ll simply not use it.”
Musk said he didn’t foresee his business operations in China causing problems if he takes control of Twitter. The Tesla CEO, also the world’s richest person, counts on China as a key production base and growing consumer market for his electric vehicles.
Twitter is officially banned in China, but the country uses it to spread its message overseas—sometimes with the help of its own spam bot armies. Amazon.com Inc. founder Jeff Bezos alluded to the potential conflicts in a tweet shortly after the Twitter takeover announcement, asking “Did the Chinese government just gain a bit of leverage over the town square?”
Striking a less ebullient tone than he adopts when discussing his Tesla ventures or humanoid robots, Musk on Tuesday declined to say with conviction the Twitter deal is going through. He has repeatedly raised the bot issue as an unresolved matter, suggesting he is keeping the door open for this deal to fall apart.
Musk has said he wanted to put the takeover “on hold” while he investigated how many of Twitter’s users are real people, and later filed a formal letter with the Securities and Exchange Commission in which he told Twitter executives he might walk away from the deal if the company didn’t do more to prove the size of its user base. Twitter responded by giving Musk access to its full fire hose of public tweets, though it’s unclear if that data is truly helpful in calculating the number of bots.
Twitter shares closed Friday at $37.78, 30% off the proposed takeover price.
In May, Musk dropped plans to partially fund his purchase of Twitter with a margin loan tied to his Tesla stake and increased the size of the deal’s equity component. While Musk’s agreement to buy Twitter isn’t subject to any financing conditions, the terms of the transaction require Twitter to provide any reasonable cooperation Musk requests to help with the financing arrangements.
Qatar’s Ministry of Commerce and Industry, Qatar Investment Authority and Investment Promotion Agency Qatar are the underwriters of the Qatar Economic Forum, Powered by Bloomberg. Media City Qatar is the host organization.
—With assistance from Ville Heiskanen and Ben Scent.
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