Elon Musk put on hold a $ 44 billion contract on Twitter

Elon Musk put on hold a $ 44 billion contract on Twitter

Elon Musk has temporarily put his takeover of Twitter on hold due to concerns about the number of spam and fake accounts on the social media platform, raising new doubts about whether Tesla’s CEO will complete the $ 44 billion deal.

The billionaire entrepreneur said on Twitter on Friday that the business is being maintained “down to the details that support” the calculation in the company’s regulatory submissions, which suggest that the number of fake accounts on the platform represents less than 5 percent of its 229 million users.

The estimate was included in the company’s quarterly report last week. The same calculation has also been reported in each quarterly submission since 2014.

The statement immediately hit Twitter’s stock price, with the stock falling about 20 percent in pre-US trading.

Two hours later, Musk added an additional tweet in which he said he was “still committed to the acquisition.” That helped stocks reduce their losses, leaving them down nearly 10 percent, to close at $ 40.72 on Friday.

It is unclear what the legal effect of his notification was and what exactly are the grounds for postponing the work.

The suspicion introduced by Musk’s tweet is the latest example of the dizzying way in which the transaction mergedwhich even led to Musk waiving his right to conduct due diligence during the negotiation of the terms.

Twitter and Musk did not immediately respond to a request for comment.

Twitter is now trading a 25 percent discount at a price of $ 54.20 per share that Musk agreed to pay in mid-April, signaling that investors do not believe the deal will happen even close to that price, and perhaps not at all.

Shares of Tesla, which fell 33 percent since Musk said on Twitter that he was seriously considering buying a social media platform in late March, rose more than 5 percent on Friday.

Musk said earlier that one of his priorities for the platform is “beat spam bots or die trying” and authenticate human accounts.

In Twitter submissions back eight years, the company said less than 5 percent its daily active users that can be redeemed were fake or spam accounts.

“In making this decision, we have made significant judgments, so our estimate of fraudulent or unsolicited orders may not accurately represent the actual number of such orders, and the actual number of fraudulent or unsolicited orders could be higher than we estimated,” Twitter said. last quarterly submission.

Musk’s move comes just a day after Twitter CEO Parag Agrawal announced current employment freeze, cost-cutting measures and the departure of two senior leaders. The company has faced long-term investor pressure due to slow growth compared to rivals such as Meta and TikTok.

On Twitter on Friday, Agrawal commented on the changes, saying he “expects the business to close” but the company must “be ready for all scenarios”.

The billionaire’s offer to buy Twitter caused a shock in the world of technology and finance, although many speculated that Musk was not serious about the deal or that he would eventually give up. Tesla’s boss has agreed to pay a billion-dollar fee if he withdraws from the agreement.

Daniel Ives, a strategist at Wedbush Securities, wrote in a note to analysts: “The street will see this deal as 1) likely to fall apart, 2) Musk to negotiate a lower contract price, or 3) Musk to simply give up on the Fee for a $ 1 billion break. ”

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