Elon Musk says Twitter deal is ‘temporarily suspended’

LONDON (AP) — Elon Musk said on Friday that his plan to buy Twitter for $44 billion was “temporarily on hold” as he tried to determine the exact number of spam and fake accounts on the social media platform, another twist amid signs of internal turmoil regarding the proposed acquisition.

Musk, who expressed his desire to fix Twitter’s problem with “spam bots” that impersonate real people, seemed to wonder if the company was underreporting them.

In a tweet, the Tesla billionaire linked to a May 2 Reuters article on a Twitter quarterly report that estimated that fake accounts or spam accounted for less than 5% of the company’s “monetizable daily active users” in the first quarter. .

“Twitter case temporarily on hold pending details supporting the calculation that spam/fake accounts indeed represent less than 5% of users,” Musk said, indicating he was skeptical of the number of inauthentic accounts.

It was unclear whether the issue could frustrate the deal.

Twitter did not immediately respond to requests for comment early Friday.

Shares of Twitter and Tesla swung sharply in opposite directions, with Twitter stock dropping 14% and shares of Tesla, which Musk had offered to use to help fund the Twitter deal, jumping 7% .

Investors had to weigh legal issues for Musk, as well as the possibility that the acquisition of Twitter could be a distraction from the management of the world’s most valuable automaker. The proposed deal continued to pressure Tesla shares, which had already fallen 16% this week.

The sharp rise in the price of Tesla shares before the opening bell on Friday highlighted growing doubts about the completion of the Twitter acquisition.

Musk has already sold over $8 billion value of its Tesla shares to finance the purchase.

Originally, Musk pledged to borrow $12.5 billion with Tesla stock as collateral to buy Twitter. It would also borrow $13 billion from banks and invest $21 billion in Tesla equity.

Musk last week boosted his stake in his Twitter offering with commitments of more than $7 billion from a diverse group of investors, including Silicon Valley heavyweights like the co-founder of ‘Oracle, Larry Ellison.

The money from the new investors reduces the amount borrowed against Tesla’s stock value to $6.25 billion, according to the filing. Tesla’s equity share could rise from $21 billion to $27.25 billion.

Wedbush analyst Dan Ives, who follows both Tesla and Twitter, said Musk’s ‘weird’ tweet would lead Wall Street to think the deal is likely falling apart, Musk tries to negotiate a lower price, or he simply walks away from facing a $1 billion fine.

“Many will see this as Musk using these Twitter drop/spam accounts as a way out of this deal in a changing market,” Ives wrote.

He added that Musk’s use of Twitter rather than a financial record to make the announcement was troubling and “sends this whole deal into a circus spectacle with many questions and no concrete answers as to a way forward. for this deal.”

Musk’s tweet comes a day after the social media company fired two of its top executives. Twitter said the company is suspending most hiring, except for critical positions, and “reducing non-salary costs to ensure we are accountable and efficient.”

In a memo sent to employees and confirmed by Twitter, CEO Parag Agrawal said the company fell short of growth and revenue milestones after the company began “aggressively” investing to expand its user base. and its income.


AP Business Writer Michelle Chapman in New York contributed to this report.

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