NDTV News

NDTV.com provides latest news from India and the world. Get today’s news headlines from Business, Technology, Bollywood, Cricket, videos, photos, live news coverage and exclusive breaking news from India.

https://www.ndtv.com/

Will Elon Musk Give Twitter The Boot Over Bots? Experts Weigh In.

Will Elon Musk Give Twitter The Boot Over Bots? Experts Weigh In

Elon Musk Twitter Deal: Elon Musk's took over Twitter in a $44 billion cash deal.

Elon Musk may find a way to prove his claim that spam accounts on Twitter Inc's platform are significantly higher than the social media company has estimated, but showing that he and investors were misled will be difficult, legal experts say.

Musk tweeted on Tuesday that his $44 billion deal to acquire Twitter could not proceed until the company shows proof to back its estimate that spam accounts make up less than 5% of its user base. He has said he believes the figure is at least four times greater and that he will "defeat the bots or die trying."

Independent researchers have projected that 9% to 15% of the millions of Twitter profiles may be bots.

For its part, Twitter has said in its regulatory filings that it applied "significant judgment" in coming up with the estimate and has cautioned that its disclosure may not accurately represent the actual number of spam accounts.

It is these disclaimers that give Twitter protection against potential lawsuits, be they from Musk over the deal or shareholders over the accuracy of the company's regulatory statements, four securities law experts interviewed by Reuters said.

Even if Twitter's estimate is off, a plaintiff would have to show that the San Francisco-based company was seeking to willfully mislead investors -- a tall order to prove in court. The Securities and Exchange Commission (SEC), the U.S. regulator which oversees the disclosures of publicly listed companies, would have a hard time doing so for the same reasons, the experts said.

"It would be difficult to establish the basis for either an SEC enforcement case or a shareholders action, unless it could be shown that Twitter deliberately or recklessly disregarded information that would show that its spam estimates were misleading," said law firm Moses & Singer partner Howard Fischer.

An SEC spokesperson declined to comment.

A Twitter spokesperson said the company's board planned to complete the deal with Musk at the agreed price and enforce the merger agreement. Musk representatives did not respond to requests for comment.

Another legal hurdle for Musk is his decision to waive due diligence when he negotiated the Twitter deal. Legal experts have said this makes it more challenging for Musk to argue in court that Twitter misled him.

To be sure, Musk may be able to walk away or renegotiate the deal at a lower price even if the law is on Twitter's side. This is because any litigation is likely to be protracted, and Twitter may decide it makes more sense to agree to a lower price or receive the $1 billion break-up fee Musk has to pay for not completing the deal, rather than try to force him to complete the transaction in court.

Investors are betting as much. Twitter shares ended at $38.32 on Tuesday, a close to 30% discount to the $54.20 per share deal price, indicating the market deems it likely that the deal gets completed at a lower price or is abandoned.

Showing Bad Faith

To meet the legal standard of showing Twitter misled investors over the spam accounts, evidence that the company acted in bad faith would be required, the experts said. This could be internal documents like e-mails or testimony from a whistleblower.

"This failure would have to rise to the level of willful ignorance, not just negligence," said Georgetown University Law School professor Urska Velikonja.

The issue of fake and spam accounts is important for Twitter's business. The company's shares plunged in 2018 after it carried out a purge of automated and spam accounts that prompted its monthly active users to drop by 1 million, when analysts had expected a gain of 1 million users.

Robert Frenchman, a partner specializing in white-collar crime at law firm Mukasey Frenchman, said it was possible that the SEC would end up reviewing the issue of Twitter's spam account disclosures given the public attention it has attracted. But he added he did not expect Twitter to face any significant legal threat.

"I don't see that as something that is likely to fall into the category of materially misleading and I bet that language is carefully drafted and with a methodology that may not be foolproof but that's reasonable," Frenchman said.

Будь-який проект починається з визначення цільової аудиторії (ЦА), тому що жоден бізнес не зможе існувати без розуміння своїх споживачів, їхніх про...
Останні новини
FBI searches Donald Trump’s Florida estate

FBI searches Donald Trump’s Florida estate

Former US president Donald Trump’s home has been searched by FBI agents over classified information. #DonaldTrump #FBI #Shorts SUBSCRIBE to our YouTube channel for more videos: Follow us on Twitter: Like us on Facebook: Follow us on Instagram: Fol...

Albuquerque mayor on ramping up investigation into killings of 4 Muslim men.

Albuquerque mayor on ramping up investigation into killings of 4 Muslim men.

State and federal investigators are looking into the recent fatal shootings of four Muslim men in Albuquerque, New Mexico. The murders all happened within the past nine months and police believe the incidents may be connected. The mayor of Albuque...

Taiwan Holds Live-Fire Artillery Drills To Test Combat Readiness, Officials Say.

Taiwan Holds Live-Fire Artillery Drills To Test Combat Readiness, Officials Say.

Taiwan held live-fire artillery drills in Pingtung County on its southeastern coast early on Tuesday to test combat readiness in response to China’s military drills near the island, officials said. China launched a series of military drills follow...

This Morning’s Top Headlines – August 9

This Morning’s Top Headlines – August 9

The FBI conducts an overnight search of former President Donald Trump's Mar-a-Lago Florida residence allegedly looking for classified documents he took from the White House, President Joe Biden pledges federal aid to the eastern Kentucky areas rav...

Ongoing interest rate hikes may finally put zombie firms to rest - DW Business.

Ongoing interest rate hikes may finally put zombie firms to rest - DW Business.

'Zombie companies' — unproductive firms that cannot pay their debt interests — may finally be put to rest, as ongoing interest rate hikes constrict access to the easy credit that was their lifeline. Will workers and the wider economy pay the price...

1 9

Concha: 'This is going to have a boomerang effect'

Concha: 'This is going to have a boomerang effect'

Fox News contributor Joe Concha sounds off on the implications of the FBI's raid on former President Donald Trump's Mar-a-Lago. #FoxNews Subscribe to Fox News! Watch more Fox News Video: Watch Fox News Channel Live: FOX News Channel (FNC) is a 24-...

1 34