Musk, Twitter Workers Set to Face Off at Town Hall Meeting

Elon Musk will meet with Twitter staff for the first time Thursday as the billionaire looks to smooth his $44 billion takeover path.

Updated at 11:17 am EST

Twitter  (TWTR) – Get Twitter Inc. Report shares moved higher Tuesday, but still sit well below the level at which Elon Musk has said he’ll purchase the company, ahead of a town hall meeting with the Tesla  (TSLA) – Get Tesla Inc. Report CEO later this week.

Musk is set to address Twitter employees for the first time ever on Thursday, according to a company-wide email sent by CEO Parag Agrawal, as the microblogging website prepared to vote on the $44 billion takeover bid put forward by the world’s richest man later this summer.

Whether the meeting indicates a desire to complete the on-again/off-again deal, however, is anyone’s guess, with Musk only last week questioning the group’s filings with the Securities and Exchange Commission that peg the number of so-called ‘bot’ accounts at less than 5% of total users on the platform.

The website reportedly agreed to share a “firehose’ of data with Musk, including details of the more than 500 million Tweets posted each day, in order to placate his concerns over the level of fake accounts.

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Twitter shares were marked 3.36% higher in late morning trading Tuesday to change hands at $38.29 each, a move that would still leave the stock around 28% shy of Musk’s ‘best and final’ offer of $54.20 per share.

Twitter shares have fallen around 24.6% since April 28, when the group reported stronger-than-expected first quarter earnings of 61 cents per share on revenues of $1.2 billion. 

Twitter had previously said it sees revenue growth in the “low to mid 20% range” and held onto its 2021 guidance that sees $7.5 billion in revenues and 315 million daily active users by 2023.

Twitter said average monetizable daily active users, its term for the number of daily users who can view ads, rose 5.5% from the December quarter to 229 million, with a 39.6 million gain of U.S.-based users.

However, the group noted that an error in March of 2019 set up the overstatement of MDUAs for the reporting periods that followed, up until the end of last year, casting doubt on the comparable figures. 

That may have prompted Musk’s focus on the so-called ‘fake account’ controversy, leading to his threat to tear-up his merger agreement last week as Texas Attorney General Ken Paxton launched a probe into the billionaire’s claims.

Musk, who waived his right to due diligence on the deal when it was unveiled earlier this spring, said yesterday that Twitter is “transparently refusing to comply with its obligations under the merger agreement”, adding that he is not persuaded by its “lax testing methodologies” on the calculations of fake accounts.

He accused Twitter of being in a “clear material breach” for failing to provide the data and threatened his “right to terminate the merger agreement” as a result.

The Wall Street Journal reported Sunday that as many as 70% of Musk’s nearly 100 million followers are spam, fake or inactive, citing data from audience-research software group SparkToro LLC.

The Tesla CEO has previously said there is “some chance” the number of fake and bot accounts “might be over 90% of daily active users”, but provided no proof for his assertion. 

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