Why fake accounts have become a sticking point in Elon Musk's Twitter acquisition

Some analysts consider Musk's concern over spam accounts on Twitter a pretext, but the prevalence of such accounts threatens the company's revenue and credibility.

Tesla CEO Elon Musk's $44 billion bid to purchase Twitter struck an unexpected roadblock early Friday morning when he tweeted that he had put the deal "temporarily on hold," citing concern over the prevalence of bot and spam accounts on the platform.

Along with his tweet, Musk posted a Reuters report about a public filing from Twitter earlier this month that said fake accounts make up less than 5% of users on the platform. Musk sounded a skeptical note, saying he wants "details supporting calculation that spam/fake accounts do indeed represent less than 5% of users."

Nearly two hours later, Musk assured observers that he remains "committed to acquisition." But damage had been done. The price of Twitter shares plunged Friday, closing more than 9% down.

Market analysts said the worry over fake accounts could serve as a pretext for Musk to bargain a lower price for the acquisition or abandon the effort altogether. The share prices of both Tesla and Twitter have fallen in the weeks since Musk reached a deal to purchase the social media platform, on April 25, potentially making the acquisition less attractive for Musk.