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Yahoo Finance’s Dan Howley joins the Live show to discuss Elon Musk urging the SEC to review Twitter’s user numbers.
- Welcome back, everyone. This saga between Elon Musk and Twitter carries on today with Musk calling on the SEC to review the social media platform's user numbers and Twitter doubling down on its merger agreement. Yahoo Finance's tech designated hitter, DH, Dan Howley, he's got the details.
DAN HOWLEY: That's right. So essentially, what we're seeing here is Elon Musk almost backing away from the deal to a degree, not necessarily coming out and saying that he's backing away. He has said before that he will stick to it. Twitter now is really telling him that he's going to stick to it at the original price that they agreed upon, saying that, more or less, that they want their shareholders to vote in favor of this, the whole idea there being that Twitter, it seems, suspects that Musk is trying to lower that sale price from the current $42.40, the $44 billion that we had discussed originally, from there to something less.
And his whole way of doing this is discussing the so-called bot issue. Now, just to give you an idea, bots are a thing that Twitter purposely makes. There's an Application Programming Interface, or API, that is available to users or to companies to create bots. And a lot of bots are, believe it or not, very helpful. You can use them for things like getting the latest sports scores. Sometimes they update you on natural disasters or alerts for different emergencies.
But there are some, obviously, that are used by cybercriminals or more nefarious people looking to scam folks out of their crypto wallets, out of cryptocurrency, their own regular currency, their private information, things along those lines. And that appears to be Musk's big issue. Remember, there were a few crypto scams going on pretending to be Elon Musk.
And then, oh, yeah, there was that kid who set up that bot, a 19-year-old who had set up that bot that would track Elon Musk's jet. He was none too happy about that, tried to get the kid to leave well enough alone, offered him $5,000. The kid said, no, give me a Tesla and maybe a job. And Elon Musk kind of went radio silent there.
So you could see where he may have this issue of why this exists. But in the grand scheme of things, there's no way, regardless of how much he wants to get rid of bots, that he will ever get rid of bots because there is that application programming interface where bots are a good part of Twitter in a good sense. But even if they do away with the API, there are still bots on other social media platforms that don't even offer that, like Facebook, TikTok, Instagram. So there's no real way for him to do away with bots.
And his big contention here is that it's not actually less than 5% of Twitter users that are bots, the way Twitter tells it. We had Twitter CEO Parag Agrawal, basically explaining how they go got to that number. Elon Musk saying, no, open that up to the public. Everyone should be able to see. And we just don't necessarily know where we're going to end up here. But it really is just a back and forth at this point. And as much as he says he wants to get rid of these bots, it's just not going to happen.
JULIE HYMAN: Well, and not only that-- he says he wants to get rid of the bots. He says this is why he won't be negotiating the deal. I keep coming back to Matt Levine of Bloomberg's column from yesterday, where he wrote about this issue, as he has been throughout this whole thing. And he said, quote, "I think it is important to be clear here that Musk is lying. The spambots are not why he's backing away from the deal." So initially, when he talked about wanting to take over Twitter, in part to reduce the bots, fine, that was one of the reasons. But clearly, this is a red herring.
DAN HOWLEY: Yeah, I mean, the big thing that he wanted to do was loosen up speech on there. And for whatever reason, he believes that speech is a problem on Twitter when in actuality, it's not. It's Twitter using its own free speech to moderate content that it thinks that users want to see-- and, by the way, advertisers want to see, because I feel like Tide doesn't want to have an ad next to some neo-Nazi. That's probably not good for Tide, and so not good for Twitter.
And so that's what Twitter does, and that's their First Amendment right to do that. But Elon Musk seems to think that it should be opened up totally, and then doing that will allow for an even greater kind of conversation. I don't know if you've ever been on Twitter. Conversations on there are already awful. So I don't know how much more open you can get it before it just descends into a pit.
JULIE HYMAN: Well, him complaining about free speech won't get him out of the deal, whereas maybe complaining about the spam bots--
DAN HOWLEY: $1 billion maybe, $1 billion.
- Yahoo Finance's own Dan Howley. Appreciate the breakdown here today.