He stated that he was awaiting information “to support [the] calculation that spam/fake accounts do indeed represent less than 5% of users.”
Musk has been vocal about the need to clean up spam accounts.
Analysts speculated that he may be attempting to renegotiate the price or even walk away from the takeover.
Musk later stated that he was “still committed to the acquisition,” but the revelations fueled Wall Street skepticism, sending Twitter’s stock price plummeting.
In New York, shares were down 10% in early trading. Even before Musk’s comments, the stock was trading for less than the $54.40 he had offered, indicating that the markets were not convinced he would complete the takeover.
If either Twitter or Musk decides to leave, they must pay a $1 billion termination fee to the other party.
Twitter reported more than two weeks ago that fake accounts made up less than 5% of its daily active users in the first three months of this year.
However, the company stated that it “applied significant judgment” in determining the number of spam accounts, so “our estimation of false or spam accounts may not accurately represent the actual number of such accounts.”
“The actual number of fake or spam accounts may be higher than we estimate. We are constantly working to improve our estimation of the total number of spam accounts “It stated.
Musk, the world’s richest person according to Forbes magazine, is now investigating that figure.
Twitter has long had a problem with automated, bogus accounts that post content incessantly.
Musk has called for “defeating the spam bots” on Twitter, among other changes, including the reinstatement of some banned accounts, including that of former US President Donald Trump.
Musk’s tweet, according to Dan Ives, a tech analyst at investment firm Wedbush Securities, will “turn this Twitter circus show into a Friday the 13th horror show.”
Wall Street will now “view this deal as 1) likely falling apart, 2) Musk negotiating a lower deal price, or 3) Musk simply walking away from the deal with a $1 billion break-up fee,” he said.
Mr Ives stated that if Musk decides to proceed with the deal, a “clear renegotiation is likely on the table.”
He added that many people would see him highlighting the number of spam accounts as a “way out of this deal in a rapidly changing market.”
“The nature of Musk creating so much uncertainty in a tweet (rather than a filing) is very troubling to us… and now sends this whole deal into a circus show with many questions and no concrete answers as to the future path of this deal.”
Another twist in Elon Musk’s attempt to acquire Twitter.
He stated that one of his top priorities was to “clean up” the platform by removing bots and spam accounts that he believes are slowing it down.
Spend any amount of time on it, and you’ll see evidence of both.
Twitter, on the other hand, claims that less than 5% of its active users are fake.
So, there’s no diamond in the rough to be polished here, and what you see on Twitter is ultimately what you get? And, if so, does that make the proposition less valuable?
It’s also possible that his new reluctance stems from how he plans to finance the transaction – he’s already had to sell some of his valuable Tesla stock to raise funds, which has had an impact on the car company.
Musk needs to think about something.
Musk is also the CEO of Tesla, and he has used a large portion of his Tesla stock to help finance the Twitter takeover.
He sold $8.5 billion in Tesla stock and had planned to borrow $12.5 billion secured by his shares, but this was reduced to a $6.5 billion loan.
Tesla’s stock price has plummeted since Mr Musk announced his intention to buy Twitter, raising fears that he would have to sell more stock.
However, after Mr Musk tweeted that the deal was on hold for the time being, Tesla’s stock price increased by 6.7 percent in pre-market trade.
Musk’s latest move comes after two Twitter executives announced their departure from the social media company.
Kayvon Beykpour, who oversaw Twitter’s consumer division, and Bruce Falck, who oversaw revenue, both tweeted on Thursday that the departures were not their choice.
The company also announced this week that it had paused most hiring, except for “business-critical roles.”
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