Elon Musk says his $US44 billion ($63 billion) offer would not move forward until Twitter Inc shows proof that spam bots account for less than five per cent of its total users, hours after suggesting he could seek a lower price for the company.
“My offer was based on Twitter’s SEC filings being accurate. Yesterday, Twitter’s CEO publicly refused to show proof of <5 per cent (spam accounts). This deal cannot move forward until he does,” Musk said in a tweet on Tuesday.
After putting his offer on hold last week pending information on spam accounts, Musk said he suspected they make up at least 20 per cent of users – compared with Twitter’s official estimates of five per cent.
“You can’t pay the same price for something that is much worse than they claimed,” he said at at the All-In Summit 2022 conference in Miami on Monday.
20% fake/spam accounts, while 4 times what Twitter claims, could be *much* higher.
My offer was based on Twitter’s SEC filings being accurate.
Yesterday, Twitter’s CEO publicly refused to show proof of <5%.
This deal cannot move forward until he does.
— Elon Musk (@elonmusk) May 17, 2022
Asked if the Twitter deal is viable at a different price, Musk said at the conference, “I mean, it is not out of the question. The more questions I ask, the more my concerns grow.”
“They claim that they’ve got this complex methodology that only they can understand … It can’t be some deep mystery that is, like, more complex than the human soul or something like that.”
The stock had on Monday dropped more than eight per cent to close at $US37.39 ($53.41), lower than its level the day before Musk revealed his Twitter stake in early April, sowing doubts that the billionaire entrepreneur would proceed with his acquisition at the agreed price.
Twitter chief executive Parag Agrawal tweeted on Monday that internal estimates of spam accounts on the social media platform for the last four quarters were “well under five per cent,” responding to days of criticism by Musk of the company’s handling of fake accounts.
Twitter’s estimate, which has stayed the same since 2013, could not be reproduced externally given the need to use both public and private information to determine if an account is spam, Mr Agrawal said.
Musk responded to Mr Agrawal’s defence of the methodology with a poop emoji.
“So how do advertisers know what they’re getting for their money? This is fundamental to the financial health of Twitter,” he wrote.
Musk has pledged changes to Twitter’s content moderation practices, railing against decisions like its ban of former President Donald Trump as overly aggressive while pledging to crack down on “spam bots”.
Musk has called for tests of random samples of Twitter users to identify bots. He said, “There is some chance it might be over 90 per cent of daily active users.”
Independent researchers have estimated that anywhere from nine to 15 per cent of the millions of Twitter profiles are bots.
Spam bots or fake accounts are designed to manipulate or artificially boost activity on social media platforms such as Twitter.
Twitter does not currently require users to register using their real identities and expressly permits automated, parody and pseudonymous profiles.
It does ban impersonation and spam, and penalises accounts when it determines their purpose is to “deceive or manipulate others” by engaging in scams, co-ordinating abuse campaigns or artificially inflating engagement.
Musk’s comments to a private audience could add to concerns about his disclosures of market-moving information.
Musk, known for his candid Twitter posts, has a long history of skirmishes with the US Securities and Exchange Commission.
Recently, a US judge slammed him for trying to escape a settlement with the SEC requiring oversight of his Tesla tweets.
The Reserve Bank of Australia board believed there was a risk of inflation pressures building even further if it waited any longer to raise the cash rate for the first time in more than a decade.
The minutes of the RBA’s May board meeting released on Tuesday said it would be more difficult to return inflation to the target if the “inflation psychology in Australia were to shift in an enduring way”.
That meeting endorsed an increase in the cash rate to 0.35 per cent from a record low 0.1 per cent, earlier than had been expected just a few months previously.
There had been an expectation among economists that the RBA would hold off raising the cash rate until the June board meeting. That would allow it to also asses the March quarter wage-growth figures, which will be released on Wednesday.
However, the central bank could not ignore a surge in inflation to an annual rate of 5.1 per cent in the March quarter, and well above its 2-3 per cent target.
The minutes say the significant rise in inflation had been largely the result of global factors, which were likely to have a more temporary effect.
“[But] the flow of information on inflation and wages over the preceding month had been consistent with more persistent inflationary pressures arising from limited spare capacity in the domestic economy,” they say.
As such, board members agreed the condition the board had set to increase the cash rate had been met.
“They also agreed that further increases in interest rates would likely be required to ensure that inflation in Australia returns to the target over time,” the minutes say.
“In making its decisions, the board agreed that it will continue to be guided by the evidence on both inflation and the labour market, while noting that significant uncertainties remain.”
At this stage, economists are expecting a further 0.25 percentage point increase in the cash rate at the RBA’s June board meeting.
However, there might be a bigger increase if Wednesday’s wages data for the March quarter proves stronger than forecast.
Whatever the case, economists expect the cash rate could reach about 1.5 per cent by early 2023.
Meanwhile, consumer confidence took a further tumble in the past week as cost of living pressures continue to mount, not helped by a renewed rise in petrol prices.
The ANZ-Roy Morgan consumer confidence – a guide to future household spending – shed another 1.3 per cent to 89.3, its lowest level since mid-August 2020 and during the depths of the early stage of the pandemic.
“Cost of living concerns are front and centre for consumers,” ANZ head of Australian economics David Plank said.
Concern about the outlook for interest rates is particularly weighing on respondents who are paying off a home loan, among whom confidence fell by a further 0.6 per cent for a cumulative 14.7 per cent decline in the past three weeks.
Consumer inflation expectations also rose 0.2 percentage points to 5.3 per cent as petrol prices rose.
The Australian Institute of Petroleum’s weekly report on Monday showed the national average for petrol prices rose by a further 5.4 cents to 185 cents per litre, the fourth weekly increase in a row.
Another wild ride for US sharemarkets last week, down over 6 per cent at one point, before a rally on Friday helped trim losses to a more respectable 2.4 per cent.
The month of May has lived up to its reputation as a volatile one for the ASX200, which closed the week 1.8 per cent lower at 7075 after being down 3.75 per cent at one point.
Here are the top five things to watch in markets this week:
1. RBA meeting minutes
The RBA’s May meeting minutes are expected to be hawkish, reinforcing expectations for another rate hike at its next board meeting in early June.
2. AU labour force survey
The market is looking for 20,000 increase in employment.
The participation rate is expected to stay at 66.4 per cent, and the unemployment rate is expected to fall from 4 per cent to 3.9 per cent.
3. First-quarter 2022 US earnings season continues
US earnings season continues with some of the country’s largest retailers set to report, including Walmart, Home Depot, Target and Lowes.
Shoppers flocked to Target during the pandemic, resulting in an acceleration in sales and earnings growth.
Adjusted EPS is expected to fall 16.2 per cent from last year to $3.09 as it comes up against tough figures from the year before.
Overall revenue is forecast to rise 2.2 per cent year on year to $24.4 billion.
4. Can Bitcoin continue to bounce back?
Bitcoin fell by 25 per cent last week to nearly $25,000 after the third-largest stable coin, Terra, de-pegged from the US dollar.
Bitcoin has since rebounded above $30,000, leaving signs of capitulation at last week’s low.
Capitulation is often seen in markets ahead of rebounds.
5. Federal election
The Australian election is just five days away.
Both polling and betting markets have the ALP well ahead.
Although these aren’t necessarily foolproof, and unlike the 2019 election, the economic policies of the major parties are similar, which means the impact on markets should be limited in the event of an ALP win.
If neither party wins enough seats to form government in their own right, then both parties will seek the help of independents to form government.
In return for their support, independents may insist on policies that are less market friendly.
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Counter-offers are flying in today’s abundant job market. With so many positions unfilled – 423,500, according to the Australian Bureau of Statistics – the war for talent is firing up.
Traditionally counter-offers have focused on increased salaries and financial incentives such as bonuses. But since the pandemic, workers are increasingly looking for offers to satisfy work-life balance priorities.
“It’s not all about money,” said Lezly D’Limi from recruitment firm talentko.
“Money helps, but a lot of people at the moment will want work from home options and in some circumstances some people may want to work a four-day week rather than getting a pay rise.
“Employers have to think of those types of offers as well. Not everyone can afford to put $10,000 or $20,000 on people’s salaries, but they can manage people working less and getting paid the same because a lot of people are looking at lifestyle.”
Job vacancies rose by 6.9 per cent between November last year and February this year. It’s given job-seekers a distinct advantage in the job market and has put employers on the back foot.
Organisations are desperately trying to guard against talent losses and avoid the costly process of hiring and training new staff, said Shane Rodgers, chief operating officer of the Australian Industry Group.
“At the moment there is a clear skills and labour shortage and people are more keen than ever to keep good people,” he said.
“There are practical considerations – a lot of skills are hard to find in the economy at the moment, but it’s also costly to train people and it probably takes companies three months to bring people up to speed in a new organisation.”
When tailored to an employee’s specific needs and wants, counter-offers can be effective ways to retain workers. But they are less likely to work when an employee has made a considered decision to leave, Rodgers warns.
“Sometimes people have applied for a job and got a job, and that is usually part of a conscious career plan,” he said.
“Sometimes people have been approached out of the blue and offered a job. If it’s part of a career plan where people have already applied for a job, committed to a job and maybe even signed a contract, counter-offers are probably less likely to be successful.
“They are more likely to be successful in cases where people have been approached out of the blue with a job offer and have to think quickly about whether it fits with their career plan, is it the right fit, is it the right culture.”
To anyone when weighing up the pros and cons of competing job offers, D’Limi and Rodgers have the following advice:
- Don’t rush your decision. Take the time to understand the conditions being offered and seek clarification on anything that doesn’t seem clear.
- Money may motivate you, but will you be happy working there? Consider the time you need to spend with family or pursue passions. Work-life balance is important and organisations understand this.
- Cultural fit. Aligning your values with a new employer is crucial. Working for an organisation you don’t believe in spells unhappiness for both parties.
- Be clear about your expectations and voice these to prospective employers. If their offers don’t match your preferred working conditions, be direct and ask them what can be done.
- Don’t be persuaded by flattery. Being headhunted is an ego boost, but it may mean you change jobs for the wrong reasons. Thoroughly check the conditions of the job offer against those in the position you already occupy.