The whole “$1 Billion break up fee” and Musk wipes his hands of the deal is not at all correct due to the way this deal was structured.
Musk waived due diligence AND agreed to a “specific performance” clause which basically means that as long as his financing for the deal is still available (and since the relevant financial institutions signed commitment letters they can’t back out either) Twitter can force him to complete the deal. And since Twitter is incorporated in Delaware and since the Delaware Chancery Court has a long history of strictly enforcing “specific performance” clauses, he has almost no way out. The only way out is to prove that Twitter knew that the number of bot accounts was extremely far off of what Twitter claimed in public filings, and even that is a long shot due his waiving of due diligence. This especially true since as Matt Levine has pointed out he publicly claimed he wanted to buy it to get rid of the bot problem, so it is difficult for him to then claim that he doesn’t want to buy it because there are too many bots.
And note, Twitter’s claims about the number of bots is specifically based on “monetizeable daily active users” a term which Twitter themselves defines in their SEC filings. I would assume that even if the total number of bot accounts is higher Twitter chose a definition that best suited their needs without actually lying about the number of bot accounts.
So it doesn’t really matter what portion of twitter accounts are fake or bots. And the fact that Musk’s OWN LAWYERS in the filing to break the deal do not claim that they have evidence that there are more bots than Twitter claims. Rather they use the very curious language that “Musk BELIEVES” there are more bots. And this is after Twitter let Musk’s team have access to the “full stream” API. I know people who have access to the academc API and the amount of data there is huge but easily useable and the full stream API has even more data. Since his team of data scientists had access to the full stream and apparently couldn’t find anything then he has nothing.
Now I am sure the number of bots is far higher than 5%, but remember Twitter in their financial filings uses the very specifically defined “monetizeable daily active users” which I suspect is actually about 5%, since they created the definition which best suited their needs.