Tesla CEO Elon Musk said Friday that he has put the Twitter acquisition on hold, with pending details about the proportion of fake accounts on the social network. However, he claims to be “still committed” to buying the social network. The movement of the NYSE-listed group fell by about 15% after this announcement in electronic trading before the opening of Wall Street. It was down 25% earlier today.
On the platform, which has nearly 93 million subscribers, Elon Musk wrote, “Twitter acquisition is temporarily suspended, pending details that spam and fake accounts account for well under 5% of users.” Called AFP, he did not immediately respond to Twitter.
Contract worth $44 billion
The social network’s board of directors in tweets at the end of April approved a $44 billion takeover offer drafted by an eccentric South African leader. Elon Musk promised to rid Twitter of spam, authenticate users and increase transparency without specifying how he intends to implement this project.
The company indicated at the beginning of May, while presenting its quarterly results, that the number of daily users, from January to March, amounted to 229 million daily users, that is, they were exposed to advertising. It was estimated on this occasion that less than 5% of them were spam or fake accounts.
Susanna Streeter, market analyst at Hargreaves Lansdown, explains that the percentage of fake accounts is a “leading indicator” for Twitter, because “counting the exact number of people who actually tweet is critical to future revenue streams through ads or paid subscriptions on the site.”
In addition to his desire to combat spam, Elon Musk said he wanted to make Twitter a bulwark of free speech, and said he was ready to reinstate former US President Donald Trump, whose account was permanently suspended after the attack on the Capitol in January 2021.
Horror movie Friday the 13th
Since the takeover offer by the head of Tesla and SpaceX, Twitter’s stock market has shrunk by billions of dollars. On Friday, the title traded at just over $38, well below the $54.20 purchase price per share offered by the billionaire.
Dan Ives of Wedbush Securities said Elon Musk’s latest tweet “will turn Twitter’s takeover circus into Friday’s 13th horror movie.” He just wants to walk away from the deal with a $1 billion severance fee,” the analyst explains in a note.
Withdrawal to protect Tesla?
However, the leader sought to reassure his ability to finance the operation, planning for a significant personal contribution and requesting a bank loan as well as a margin loan in which he pledged his Tesla shares as collateral.
Earlier this month, Elon Musk claimed to have raised just over $7 billion from various investors, Oracle co-founder Larry Ellison and Saudi Prince and businessman Alwaleed bin Talal. But for Dan Ives, the businessman has overestimated the strength of his Tesla stock, whose price has fallen sharply since the Twitter takeover was announced, and could seek to protect the electric car maker.