Business Stocks

Elon Musk says Twitter deal ‘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.

It’s another twist after signs of internal turmoil amid the Tesla billionaire’s planned buyout of the company, including that Twitter fired two of its top managers Thursday.

Twitter said that fake and spam accounts represent less than 5 per cent of the users on its platform, in a filing earlier this month.

In a tweet, Mr Musk linked to that information and said the deal would be postponed until he could see the reasoning for that calculation.

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

The news led Twitter’s share price to plunge 20 per cent, to around $36 in premarket trading, amid fears that the deal could not go through. The stock was already trading well below Mr Musk’s offer of $54.20 per share.

Mr Musk gave no indication of whether he had particular concerns about that number, or whether he believed it to be different. He also did not say why the decision had been taken to pause the deal now, when the 5 per cent number was revealed almost two weeks ago.

In the same filing, Twitter said that it had 229 million users who were shown advertising, a key internal metric. It also said that the takeover offer from Mr Musk posed special risks to the company, including concerns about whether advertisers would continue to spend on the platform and “potential uncertainty regarding our future plans and strategy”.

Mr Musk has made the eradication of spam and false accounts a central part of his proposal to buy Twitter.

He has been personally affected by the prevalence of those accounts on the platform, with a number of scammers posing as Mr Musk and attempting to trick other users into cryptocurrency scams.

Though Twitter’s board has accepted the buyout offer for Twitter, the deal could take months to complete.

Mr Musk also retains the option to leave the deal – though eh would have to pay a $1 billion fee if he did.

His announcement that the deal is on hold comes just hours after Twitter said that two of its executives were being fired in what it said was a “change of direction”.

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