Elon Musk has temporarily suspended the Twitter deal until there is clarity about fake & spam accounts. Twitter shares then plummeted.
Elon Musk temporarily puts Twitter acquisition on hold.
© Twitter Inc. / Tech Insider @ Youtube
As Elon Musk announced via Twitter, the Twitter deal has been put on hold for the time being. First, the estimates that Twitter had communicated should be checked again.
Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of usershttps://t.co/Y2t0QMuuyn
— Elon Musk (@elonmusk) May 13, 2022
Twitter itself estimates that spam and fake accounts account for less than 5 percent of monetizable users. In the first quarter of 2022, the company had a total of 229 million users served with advertising.
The disclosure comes days after Tesla CEO Elon Musk signed a deal to buy Twitter for $44 billion, tweeting that one of his priorities would be removing “spam bots” from the platform.
Twitter said the company would face further risks until the deal was finalized. For example, whether advertisers would continue to invest in Twitter or whether the deal would create “potential uncertainties about future plans and strategies” that would put customers off.
Twitter shares lose around a quarter of their value
However, Elon Musk wants clarity. If the Twitter estimates are significantly higher, it could thwart the purchase price or even the purchase. The Tesla CEO wrote the following on Twitter:
“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts actually make up less than 5% of users.”
Twitter stock lost nearly a quarter of its value in premarket trading after the tech billionaire’s tweet. The share had already suffered in advance, because investors are becoming increasingly skeptical as to whether the deal with Elon Musk will actually come about.
Read more about Musk’s planned Twitter takeover here:
Twitter: Elon Musk would reverse Trump ban