Analyst Note
| Ali Mogharabi |Elon Musk tweeted early on May 13 that his plan to acquire Twitter is “on hold” until Twitter’s claim that spam accounts represent less than 5% of its total users is supported by evidence. Approximately three hours later, the Tesla CEO tweeted that he remains “committed” to purchasing the firm. In our view, Musk will have difficulties exiting the deal even if Twitter cannot support its claim about the proportion of spam users. The firm’s statement regarding the risk of miscalculating spam users has consistently been in the risk factors section of its annual and quarterly SEC filings, which any buyer should be aware of. In our view, Musk cannot claim that this news was surprising.