The richest man in the world and director of the electric car company Tesla, Elon Musk, announced the temporary suspension of the acquisition of the total shares of the social network Twitter for US $ 44,000 million, which produced a drop of more than 9 .6% in the papers of the company.
Musk announced the suspension of the transaction pending details on the proportion of false accounts on the platform, although it later indicated that it remained “committed” to completing the operationspecified the AFP news agency.
His wavering behavior raised suspicions that Musk’s ultimate goal is to achieve a lower price for the company’s purchase.
Wedbush analyst Dan Ives said Twitter’s “circus sideshow” could turn into a “Friday the 13th horror show.”
“Wall Street investors may interpret the tweet as an attempt by Musk to withdraw from the deal or to try to force a lower price,” Ives said.
After Musk’s message, Twitter shares fell as much as 25% before the official opening of the market in the United States.
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 deal temporarily suspended pending details supporting calculation that fake/spam accounts account for less than 5% of users,” Musk posted on Twitter.
A few hours later, the businessman sent out another tweet saying he is “still committed” to the deal and shares of Twitter recovered some of the decline.
In fact, the stock of Twitter listed on the New York Stock Exchange lost more than 9% at 6:30 p.m. GMT (3:30 p.m. in Argentina) and traded at US $ 40.6 per paper.
Musk made rooting out fake accounts and user transparency central to his purchase of the social network, for which he offered $44 billion last month.
In its latest quarterly results, Twitter reported that “the average number of fake or spam accounts during the first quarter of 2022 represented less than 5% of monthly daily active users during the quarter.”
However, Twitter clarified that it applied “significant judgment” to its latest estimate and that the actual number could be higher, according to Bloomberg.
When he announced his deal to buy the company last month, Musk said he wanted to defeat spam bots, authenticate all humans and make his algorithms open source.
Musk’s latest tweets came just hours after news broke that Twitter was freezing hiring as part of pre-deal cost-cutting efforts.
According to Bloomberg, the suspension is likely to be aimed at negotiating a deal that is 15-20% cheaper and closer to the market capitalization of rival Snap.
Aside from questions about the extent of spam bots on the Twitter platform, Musk is still in talks with investors to raise enough capital and senior financing to eliminate the need for any margin loans tied to his Tesla shares, according to people. with knowledge of the matter.
“Musk has never been fully funded, we know from his constant attempts to get financial support,” said Neil Campling, head of TMT research at Mirabaud Equity Research.
“Twitter’s board has been held hostage and they alone are to blame for this mess. No other buyer will emerge; if Musk decides he’s still interested, he can name his price and it won’t be any higher,” he concluded.
