According to a new report from Insider, many of Musk’s equity partners, who agreed to back Musk’s original $44 billion offer for Twitter, are now seeking to exit the deal, rather than paying their share of the deal price.
As per investor Andrea Walne from Manhattan Venture Partners: “Everyone’s trying to get out of it, no one thinks Twitter should be valued at $44 billion.” Twitter’s current market cap is $38.52 billion, but some analysts have it much lower than that, even down in the $10-$12 billion range.
As he’s sought to exit the Twitter deal, Musk has made or amplified significant claims around the platform’s bot problems, staff and board issues, security flaws and much more.
What Went Wrong?
So what went wrong? Ignoring that Musk tried to cancel the deal, and now is trying to keep the deal going seemingly to save face, there are still a lot of issues with the deal:
BOT PROBLEMS: In July, Musk claimed that as many as 15% of Twitter users are bots, and called for the platform to do something about it. While it’s true that there are bots on Twitter (and on every other social media platform), most estimates put the figure far lower than 15%. In fact, a recent study by Pew Research found that just 8.5% of tweets come from bots. Given that bots make up such a small percentage of Twitter users, it’s hard to see how they could be causing such big problems for the platform.
SECURITY FLAWS: In August, Musk claimed that Twitter had “serious security flaws” and urged his followers to delete their accounts. It’s unclear what specific security flaws Musk was referring to, but Twitter has been consistently ranked as one of the most secure social media platforms when it comes to data privacy. In fact, a recent study by Comparitech found that Twitter was more secure than Facebook, Instagram, and Snapchat when it comes to data privacy and user protection.
STAFF AND BOARD ISSUES: In September, Musk claimed that Twitter was “incapable of being fixed” because of its “lackluster leadership.” It’s true that Twitter has had some turnover in its executive ranks in recent years, but so have most other tech companies. As for the board, Musk himself is one of three new members who joined in July. And while it’s still early days, there hasn’t been any indication that the new members are unhappy with their experience so far.
It remains to be seen whether Musk will actually go through with his plan to take Twitter private, but one thing is clear: the deal has turned sour and there are no easy answers for how to fix it. For now, all we can do is sit back and watch as this saga unfolds. Who knows? Maybe we’ll even get lucky enough to see a tweet from Musk himself about it someday… (fingers crossed!)
