On Friday (May 13), Tesla CEO Elon Musk announced that the 44 billion dollar Twitter deal has been temporarily put on hold, subject to the estimate that less than 5% of users on the micro-blogging platform are spam/fake accounts.
“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users,” Musk had tweeted. He had also shared the link of a Reuters report dated May 2, 2022.
As per the report, Twitter Inc. in a filing has noted that fewer than 5% of 229 million users, who were served ads, during the first quarter of 2022 were false/ spam accounts.
“Twitter said in the filing it faced several risks until the deal with Musk is closed, such as whether advertisers would continue to spend on Twitter and potential uncertainty regarding our future plans and strategy,” the report added.
Musk had earlier stated that one of his main priorities is to rid the micro-blogging platform of spam accounts.
However, while announcing that the deal is put on temporarily hold, Musk didn’t elaborate what is the concern with the Twitter’s filing on spam / fake accounts. He didn’t say whether he does not believe the number, and whether he will seek an reassessment of if. It is also not known why he announced it today when the filing was made two weeks ago and has been in public domain since then.
Twitter stock crashed by over 20% following the Tweet by Elon Musk, trading at around $36 in premarket trading. The stock was already trading well below Musk’s offer of $54.20 per share, which plummeted further after the announcement.
However, later Elon Musk tried to allay concerns about the deal by tweeting that he is “still committed to acquisition” of Twitter.
Still committed to acquisition— Elon Musk (@elonmusk) May 13, 2022
Elon Musk takes over Twitter Inc.
Elon Musk, who was already the largest individual shareholder of Twitter holding 9.2% of the company, had earlier stated that he had no faith in the management and couldn’t fulfil Twitter’s true potential under them. He aimed to make the company private so that he could have full control over it and could direct Twitter to fulfil its full potential.
Twitter’s board had tried its best to resist Elon Musk’s takeover bid, including trying to trigger the poison pill strategy. However, the price Musk offered coupled with the mood of the majority of Twitter shareholders eventually forced the Twitter board’s hand.
Elon Musk, who is already the CEO of electric vehicle giant Tesla and SpaceX, had sealed the fate of the micro-blogging platform in a 44 billion dollar deal. Following the takeover, Twitter Inc. has locked changes to its source code to prevent disgruntled employees from making unauthorised changes to the platform.