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Elon Musk says Twitter deal is ‘temporarily on hold’

Elon Musk says Twitter deal is 'temporarily on hold'

Elon Musk said Friday that his planned $44 billion purchase of Twitter is "temporarily on hold."

Elon Musk said Friday that his planned $44 billion purchase of Twitter is “temporarily on hold” pending details on spam and fake accounts on the social media platform, a turning point amid signs of internal turmoil over the proposed acquisition. .

In a tweet, the Tesla billionaire cited a financial filing from Twitter from a Reuters story from May 2 that estimated false or spam accounts of less than 5% of the company’s “monetable daily active users” in the first quarter. had gone.

“The Twitter deal, tentatively pending details, supports the calculation that spam/fake accounts actually represent less than 5% of users,” Musk said, adding that he suspects the number of unauthenticated accounts would be so high. is less.

A little later on Friday morning, Musk tweeted that he was committed to the purchase.

It was not clear whether the issue could affect the deal. Shares of both Twitter and Tesla jumped sharply in opposite directions, with Twitter stock falling 17% to $37.20 before the start of trading in the US, and Tesla, which Musk bought 5 to help fund the Twitter deal. % jumped. Twitter’s share price is now well below the $54.20 per share that Musk agreed to pay for the company.

Calling Musk’s tweet “bizarre,” Wedbush Securities analyst Dan Ives said, “The implications of this tweet will send this Twitter circus show Friday the 13th horror show as the Street will now view the deal as 1) Potentially rupture, 2) Musk negotiating a lower deal price, or 3) Musk walking away from the deal with only a $1 billion breakup fee.”

Twitter disclosed its findings on bots and spam accounts in a filing for its first-quarter results. The company said, “We have conducted an internal review of a sample of accounts and estimated that the average of false or spam accounts represented less than 5% of our accounts during the first quarter of 2022. [monetizable daily active users] during the quarter.”

Twitter said it was possible that “the actual number of false or spam accounts may exceed our estimates.”

Investors have weighed in on legal troubles for Musk, as well as the possibility that Twitter’s acquisition could be a distraction from driving the world’s most valuable automaker. Musk has also come under scrutiny for his tendency to disclose so-called “material information” — information that could affect a publicly traded company’s stock price — via Twitter, rather than through regulatory filings.

“It is deeply disturbing for us to see Musk create so much uncertainty in one tweet (and not the filing),” Ives said in his note to investors.

Musk’s tweet comes a day after the social media company sacked two of its top managers. Twitter said the company is halting most hiring except in critical roles, and is “pulling back on nonessential labor costs to ensure we are responsible and efficient.”

In a memo sent to employees and confirmed by Twitter, CEO Parag Agarwal said the company hasn’t hit growth and revenue milestones since it began making “aggressive” investments to expand its user base and revenue. Is.

This story is basically . was published by CBS News On 13th May 2022.

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Reference from www.etonline.com

Shawna Street