Twitter’s stock crashed roughly 10 percent today after Elon Musk said that he was pulling out of the purchase deal.
JUST IN – Twitter shares extend losses, last down 10%.
— Disclose.tv (@disclosetv) July 11, 2022
RIP Twitter’s stock: pic.twitter.com/73n7gfep73
— Benny Johnson (@bennyjohnson) July 11, 2022
Musk backed out of the deal after saying that Twitter was misrepresenting the number of bots on the service.
He’s 100 percent correct that they are lying about the amount of bot activity. Twitter’s CEO Parag the Pooper comically claimed that bots are only 5 percent of the site’s user activity. No serious person believes this claim. Independent studies of Twitter have put the site’s bot activity at around 15 percent, but I’d say that the bot activity is much higher than that.
Twitter’s board apparently wants to sue Musk and force him to take the deal even though you could argue that Twitter has been committing fraud by misrepresenting the bot numbers. So I have no idea why Twitter would want to go through the legal process and expose themselves to discovery.
Whatever the case, it looks like this could go on for awhile. I don’t know if Musk will ultimately end up buying the company or not, but the longer this drags out the more scrutiny Twitter will be exposed to. The stock could be worth a fraction of Musk’s original purchase offer when all is said and done. The only thing propping it up is the belief from some investors that Musk will eventually buy it.
