Musk says deal to buy Twitter 'temporarily on hold'
Business

Musk says deal to buy Twitter ‘temporarily on hold’

Elon Musk said on Friday he was putting a temporary halt on his much-anticipated deal to buy Twitter, sending shares in the social media giant plunging.

Musk, the world’s richest man and founder of automaker Tesla, had made the eradication of spam accounts and bots one of the centerpieces of his proposed $44 billion takeover of Twitter.

When the deal was announced in late April he said he wanted to make Twitter “better than ever” by “defeating the spam bots and authenticating all humans”.

But on Friday he wrote: “Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users.”

Two hours after his first tweet, Musk took to the platform again to say he was “still committed to acquisition”.

Reliable figures for the number of users are seen as vital to judge future revenue streams.

Twitter did not immediately respond to AFP’s request for comment.

– ‘Horror show’ –
In his tweet, Musk linked to an article from May 2 referencing Twitter’s latest filing to US regulators.

The filing said an internal review had concluded Twitter had 229 million “monetizable daily active users” in the first quarter of this year, and just five percent were regarded as false or spam accounts.

Analyst Dan Ives from Wedbush said the Twitter “circus show” was likely to translate into a “Friday 13th horror show”.

“The nature of Musk creating so much uncertainty in a tweet (and not a filing) is very troubling,” he said.

Wall Street investors were likely to interpret the tweet as an attempt by Musk to pull out of the deal or trying to force a lower price, said Ives.

Market analyst Susannah Streeter of Hargreaves Landsdown said the takeover bid had been bumpy but now “risks hitting the skids”.

Friday’s initial announcement saw Twitter’s shares drop by 20 percent in early electronic trading before Wall Street opened, but Tesla’s stock rose.

– ‘False and misleading’ –
Musk is boss of both Tesla and SpaceX and is estimated to be worth $240 billion, according to Forbes.

But his style of ownership — an in particular his use of Twitter — has frequently landed him in hot water with the authorities.

He has been tangled in legal troubles ever since he tweeted in 2018 that he had enough funds to take Tesla private — a claim that a judge last month decided was “false and misleading”.

His potential stewardship of the social media platform has hit several bumps since the takeover attempt was made public, not least over the future status of Donald Trump.

The former US president was kicked off Twitter and other social networks following the attack on the US Capitol on January 6, 2021.

On Wednesday, Musk said he would be open to lifting a ban on Trump’s account.

Activist groups responded by urging advertisers to boycott the platform if Musk opened the gates to abusive and misinformative posts. (AFP)

 

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