Elon Musk says Twitter deal ‘temporarily on hold’

Elon Musk sent Twitter’s stock on a rollercoaster ride early Friday as he claimed that his $44 billion deal to take over the site was “temporarily on hold” — then insisted hours later that he was “still committed” to the buyout. 

“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users,” the Tesla CEO said in an early Friday tweet at 5:44 a.m. 

Twitter’s stock then dipped more than 25% to as low as $33.79 in pre-market trading — far below Musk’s marijuana-themed purchase price of $54.20, indicating investors were betting the deal wouldn’t go through. 

Then at 7:50 a.m., Musk posted a follow-up tweet saying that he was “Still committed to acquisition.” 

Twitter’s shares erased some of their losses and were hovering around $40 shortly before markets were set to open on Friday morning. That’s still about 11% lower than where they closed on Thursday. 

After the first tweet, Wedbush Securities analyst Dan Ives estimated that Wall Street investors now see a less than 50% chance that the deal closes. He added that Musk’s tweet amounted to a “Twitter circus show” since Wall Street is liable to view this deal as “likely falling apart” or “Musk negotiating for a lower deal price.”

Ives said Musk could be trying to rearrange the financing of the deal so he doesn’t have to be relying on leveraged shares of his electric car company, Tesla. Concerns about Musk’s Twitter takeover and a broader tech sell-off have sent Tesla shares plummeting 29% over the past month. 

Alternatively, Ives said, Musk could simply walk away from the deal and pay a $1 billion breakup fee.

“Many will view this as Musk using this Twitter filing/spam accounts as a way to get out of this deal in a vastly changing market,” he said.

Elon Musk on Twitter: “Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of usershttps://t.co/Y2t0QMuuyn / Twitter”

Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of usershttps://t.co/Y2t0QMuuyn

In Musk’s initial tweet, the billionaire included a link to a May 2 Reuters article quoting Twitter’s a Twitter regulatory filing. 

“Twitter Inc estimated in a filing on Monday that false or spam accounts represented fewer than 5% of its monetizable daily active users during the first quarter,” the Reuters article said.

Musk has said that cracking down on spam accounts and bots will be one of his top priorities for Twitter if the deal goes through. 

Investors have had to weigh legal troubles for Musk, as well as the possibility that acquiring the platform could be a distraction from running the world’s most valuable automaker.

On Thursday, Twitter said the company was pausing most hiring except for business-critical roles, adding in a statement that “we are pulling back on non-labor costs to ensure we are being responsible and efficient.”

Elon Musk on Twitter: “Still committed to acquisition / Twitter”

Still committed to acquisition

In a memo sent to staffers and confirmed by Twitter, CEO Parag Agrawal said the company has not hit growth and revenue milestones after the company began to invest “aggressively” to expand its user base and revenue.

Musk slammed on the brakes a day after two Twitter honchos were fired.

Kayvon Beykpour, the company’s general manager, and Bruce Falck, Twitter’s head of revenue, announced that they were let go by Agrawal…

Report

0 0 votes
Article Rating
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments