Elon Musk says Twitter deal is ‘temporarily on hold’

The planned $44 billion purchase of Twitter is “temporarily on hold” pending details about spam and fake accounts on the social media platform.

LONDON (AP) — Elon Musk said Friday that his plan to buy Twitter for $44 billion is “temporarily on hold” as he tries to pinpoint the exact amount of spam and fake accounts on the social media platform, another twist in the middle. signs of internal turmoil. about the proposed acquisition.

Musk, who has been outspoken about his desire to clean up Twitter’s problem with “spam bots” that mimic real people, seemed to question whether the company wasn’t reporting them.

In a tweet, the Tesla billionaire linked to a May 2 Reuters story about a quarterly Twitter report that estimated that 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 make up 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 of both Twitter and Tesla swung sharply in opposite directions: Twitter shares fell 14% and shares of Tesla, which Musk had proposed using to help fund the Twitter deal, rose 7%.

Musk has already sold more than $8 billion worth of Tesla stock to finance the purchase.

Originally, Musk had agreed to borrow $12.5 billion in Tesla stock as collateral to buy Twitter. He would also borrow $13 billion from banks and put up $21 billion in Tesla stock.

Last week, Musk bolstered the equity stake in his Twitter offering with commitments of more than $7 billion from a diverse group of investors, including Silicon Valley bigwigs such as Oracle co-founder Larry Ellison.

The money from the new investors reduces the amount borrowed on the value of Tesla shares to $6.25 billion, according to the filing. Tesla’s shareholding could go from $21 billion to $27.25 billion.

But the proposed deal continued to put pressure on Tesla shares, which had already fallen 16% this week. The sharp jump in Tesla’s share price before the opening bell on Friday signaled growing doubts that Musk will acquire Twitter.

Wedbush analyst Dan Ives, who follows both Tesla and Twitter, said Musk’s “strange” tweet will lead Wall Street to think the deal is likely falling apart, that Musk is trying to negotiate a lower price or he is simply walking away from the business. face a $1 billion fine.

“Many will see this as Musk using these Twitter archive/spam accounts as a way to get out of this deal in a very fast-moving market,” Ives wrote.

He added that Musk’s use of Twitter instead of a financial presentation to make the announcement was troubling and “sends this whole deal into a circus sideshow with a lot of questions and no concrete answers on the way forward.”

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 fired two of its top executives. 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.

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AP business reporter Michelle Chapman in New York contributed to this report.

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