Tesla (NASDAQ: TSLA) CEO Elon Musk’s $44 billion deal to acquire social media platform Twitter (NYSE: TWTR) is reportedly being threatened by controversy over its spam accounts.
Sources familiar with the matter noted that Musk believes the data provided by Twitter on the number of bots on the platform is unverifiable. The Washington Post reported on July 7th.
The sources, who spoke on condition of anonymity, said the Tesla boss has stopped engaging in certain discussions, such as funding a deal that was recently close to completion.
Evaluation of Twitter as a company
With that in mind, Musk and his team reportedly believe that amid the spam account controversy, it’s difficult to gauge Twitter’s prospects as a business venture.
Another source said Twitter was uncooperative in negotiations with Musk, and bot accounts were among the main issues in derailing the deal. Interestingly, the company’s stock has fallen since Musk announced his acquisition of Twitter, raising concerns that he may be overpaying for the deal.
It’s worth noting that it could be difficult for Musk to pull out of the deal despite deadlocked talks. Musk, who also runs SpaceX, has vowed to go through with the deal unless something bigger happens in the Twitter space.
According to the report, Musk can end the deal in court but will have to pay a breakup fee of about $1 billion.
In addition to Musk, the deal will be supported by Oracle (NYSE: ORCL Co-founder Larry Ellison, venture capital firms Sequoia Capital and Andreessen Horowitz, crypto exchange Binance and investment giant Fidelity.
The ongoing bot account controversy
In May, Musk announced that the deal was on hold until the company provided data on the bots’ accounts. After a dispute, Twitter followed suit and shared the necessary data.
According to Musk, he aims to make the platform more open and claims that content moderation practices violate freedom of expression.
Additionally, Musk’s announcement that he was acquiring Twitter destabilized the company, causing rifts and unrest among employees and executives.
There are widespread concerns that Musk could compromise the platform’s security measures. Some employees had already started job hunting and were expecting the deal to go through.