Carney: Elon Musk is right to be worried about bot accounts on Twitter—and shareholders should be worried as well. Here's why...
Elon Musk is right to be worried about bot accounts on Twitter—and shareholders should be worried as well.
For the sake of argument, let’s say that Twitter is wrong and that the real number of fake accounts is higher. If the undercount is just a few percentage points, so that the real figure is seven percent, it’s probably not a big deal. What would be a big deal is if bots make up one-third or even half of Twitter’s daily active users.
I do not think it is possible to estimate the size of potential liability that could emerge from a significant misstatement about the number of false accounts. Since the liabilities could come from so many directions, however, it is not impossible that they amount to more than the total value of Twitter. It’s definitely within the realm of possibility that they amount to more than Twitter could afford to pay and would have to declare bankruptcy.
It would make sense if some of those extending credit or equity for the deal pointed this out to Musk. The banks that have said they will provide credit for the buyout may be concerned about the potential liability. Some of the equity partners may also. No one wants to extend funds into a potential black hole of legal liability.
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