Twitter shares plummeted during pre-market trading on Friday morning after Elon Musk said his deal to buy the social media company is “on hold” until he gets more information on the number of fake and spam accounts on the platform.
Musk, whose offer to buy Twitter for $44 billion was accepted by the company’s board in April, said the takeover deal was “temporarily on hold” amid concerns over the number of fake and spam accounts on the site.
The billionaire said he was waiting on details supporting the company’s calculation that fake or spam accounts made up less than 5% of its users.
Twitter shares fell 25% in pre-market trading after the announcement.
Around two hours from his first tweet, Musk added he was “still committed to acquisition.”
Musk has previously said removing spam and fake accounts from Twitter will be one of his “top” priorities. While Twitter estimates these accounts make up fewer than 5% of daily active users, it has a history of maths errors in this area, even miscounting the number of daily users it had for three consecutive years. The pause is the latest setback in Musk’s acquisition plans, which faced initial opposition from the board and have yet to be finalized. The Securities and Exchange Commission is also investigating Musk after he put off reporting the large stake in Twitter he had acquired, something a shareholder has also sued him for.
Musk’s announcement comes less than a day after Twitter announced the shock departure of two high-level executives, a hiring freeze and cost cutting measures, partly for missing audience and growth targets.
What To Watch For
Tesla. Shares for the electric car manufacturer, which Musk leads and co-founded, jumped nearly 6% in pre-market trading on Friday morning following the announcement. The value of Tesla stock has shifted dramatically in response to other developments regarding Musk’s Twitter deal.
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