London — Elon Musk said on Friday that his planned $44 billion purchase of Twitter is “temporarily on hold” pending details of spam and fake accounts on the social media platform, another twist amid signs of internal turmoil over the proposed acquisition.
In a tweet, the Tesla billionaire linked to a May 2 Reuters story citing a Twitter financial presentation that estimated fake or spam accounts made up less than 5% of the company’s “monetizable daily active users.” in the first trimester.
“Twitter’s deal is temporarily on hold pending details to support the estimate that spam/fake accounts represent less than 5% of users,” Musk said, indicating he is skeptical the number of accounts is not authentic is so low.
It was not clear if the problem could ruin the deal. Shares in both Twitter and Tesla swung sharply in opposite directions: Twitter shares fell 17% to $37.20 before US trading opened, and Tesla, which Musk had proposed using to help to finance the deal with Twitter, rose 5%. Twitter’s share price is now well below the $54.20 per share that Musk has agreed to pay for the company.
Calling Musk’s tweet “strange,” Wedbush Securities analyst Dan Ives said: “The implications of this tweet will send this Twitter circus sideshow into a Friday the 13th horror show as now Street will see this deal as 1) probably falling apart, 2) Musk negotiating for a lower deal price, or 3) Musk simply pulling out of the deal with a $1bn break fee.”
Investors have had to weigh Musk’s legal troubles as well as the possibility that the Twitter acquisition could be a distraction from the management of the world’s most valuable automaker.
Musk’s tweet comes a day after the social media company. Twitter said the company is pausing most hiring, except for critical roles, and is “removing non-labor costs to ensure we are responsible and efficient.”
In a memo sent to employees and confirmed by Twitter, CEO Parag Agrawal said the company has missed growth and revenue milestones after the company began investing “aggressively” to expand its user base and revenue.