William Gallagher
Tesla's Elon Musk has announced that he has put his purchase of Twitter on hold temporarily, ostensibly while he checks details about spam accounts.
Musk's controversial purchase of Twitter is now at least delayed. It was already subject to a series of regulatory requirements, but Musk has tweeted that he personally has put the deal on hold.
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
According to BBC News, the issue of spam accounts that is holding up the deal relates to Twitter's claim that fewer than 5% of users on the service are fake. This figure was reported by Twitter in April 2022, as it announced its first-quarter results for the year.
The full earnings report included this detail, but qualifies it.
"In making this determination, we applied significant judgment," said the report, "so our estimation of false or spam accounts may not accurately represent the actual number of such accounts, and the actual number of false or spam accounts could be higher than we have estimated."
Fifteen days after this report, Musk now says he wants more details about this calculation. If either he or Twitter decide not to proceed with the deal, they have to pay the other party a termination fee of $1 billion.
Wedbush analyst Dan Ives told BBC News that Musk's latest tweet would "send this Twitter circus show into a Friday the 13th horror show."
"The nature of Musk creating so much uncertainty in a tweet (and not a filing) is very troubling to us," continued Ives, "and now sends this whole deal into a circus show with many questions and no concrete answers as to the path of this deal going forward."
Since the announcement of the hold, Twitter stock is down in after-hours trading over 13% to $38.86.
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28 Comments
Or buy it and fix the issue?
Nice if Twitter gets a free billion from the wazzock.
Sounds like Tesla's stock price plunge has made Musk's financing approach a costly mistake. This could just end up in the courts as a battle over who has to pay the billion for the deal falling through.
So Musk’s glorious invasion of Twitter isn’t going so well, eh? Interesting….
This being a very elaborate pump and dump is still on the table.
He may have to pay a BN but if he makes a few BN from the stock manipulation he’d come out ahead.
EDIT: Now that I think of it, if the financing falls through he might not have to pay. That would explain why he’s made several moves to depress the value of the Tesla stock he’s using as collateral.