Twitter (TWTR) shares moved lower again Tuesday as investors continue to discount the chances of Tesla (TSLA) CEO Elon Musk completing his $44 billion takeover bid for the micro-blogging website.
Musk, who threatened to tear-up his merger agreement yesterday amid yet another dispute over the size and scope of so-called 'fake accounts' on the Twitter platform, was given support in the form of an investigation by Texas Attorney General Ken Paxton, who echoed Musk's call for more data support its fake account claims.
"If Twitter is misrepresenting how many accounts are fake to drive up their revenue, I have a duty to protect Texans," Paxton said.
Twitter said it stood by its earlier filings with the Securities and Exchange Commission, which suggest less than 5% of total accounts are spam or fake, but the injection of a Texas lawmakers -- where Musk has recently moved his corporate headquarters -- suggests and even deeper reluctance on the part of the world's richest man to follow-through on his earlier effort to buy the group.
Twitter shares were marked 1.82% lower in pre-market trading to indicate an opening bell price of $38.84 each, a level that is 28.5% below Musk's 'best and final' offer of $54.20 per share.
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.
