Elon Musk says he is putting his big to acquire Twitter on hold, weeks after agreeing to take the company private in an astonishing $44 billion deal.
“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users,” Musk tweeted on Friday.
The news sent Twitter shares down 20% in premarket trading before the stock somewhat rebounded. Two hours after the initial tweet, Musk tried to calm everything down by saying he is “still committed to acquisition.”
Elon Musk’s Mega-Deal To Buy Twitter Is On Hold – Was This Just A Move To Create Hype?
Musk linked to a May 2 Reuters reporter about Twitter’s disclosure about its spam and fake account issues and on April 28th, Twitter estimated that fake or spam accounts made up less than 5% of the platform’s active users and believes this number to be ‘reasonable’. Musk, however, doesn’t seem convinced.
It’s no secret that Twitter has had a spam account problem for years, but some believe that Elon is using this as an excuse to back out of the deal as stocks have been falling since the deal was announced. Another issue may be that Elon sold part of his Tesla shares to finance the bid, as well as borrowing money against Tesla stock. With the way the economy has been, everything has lost value, including Tesla. So is Elon not able to gather the $44 billion? Or was this whole thing just to create hype and try to bolster back some cash?
While I don’t think it’s anything like that, it’s odd that he would be held up on the spam account thing. Couldn’t he just take care of that once he assumed the company?
What do you think? What’s going on with the Twitter deal and does Elon still have the capital to pull it off? Let us know in the comments below.
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