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Elon Musk put the Twitter purchase on pause. The businessman said the $44 billion deal to buy the campaign is on hold until he receives information about the number of fake social media accounts.
The company’s shares immediately fell 25%, although they later recouped part of the fall after the entrepreneur wrote in a new tweet that he still intends to see the deal through.
Elon Musk claims he is waiting for information confirming calculations that fake accounts on the social network make up no more than 5% of the total number of daily active users.
However, analysts do not exclude that he is trying to bring down the price or even looking for an excuse to refuse to buy the company.
Here is Musk’s tweet, after which Twitter shares fell 25% in pre-market trading.
However, a few hours after this tweet, Musk said that he was still going to buy Twitter.
Under the terms of the deal, whoever changes their mind will have to pay the other party a penalty in the amount of $1 billion.
About two weeks ago, Twitter reported that in the first three months of this year, fake accounts accounted for less than 5% of its daily active users.
However, the company made a reservation that it is difficult to accurately determine the number of such accounts using the available tools.
“The actual number of fake accounts may be higher than we thought. But we are constantly striving to improve our ability to estimate their total number,” the company said in a statement.
Musk, the richest man in the world according to Forbes magazine, is now studying the company’s report.
Twitter has long had a problem with fake accounts that are used to post paid content, so-called bots.
The day before, two Twitter executives announced they were leaving the company. Kayvon Bakpour, head of Twitter’s consumer division, and Bruce Falk, head of revenue, both said they didn’t leave of their own free will.
The company said this week that it had suspended hiring for new hires except for business-critical roles.
Dan Ives, technical analyst at investment firm Wedbush Securities, says Musk’s tweet turns “the Twitter circus into a Friday the 13th horror show.”
If Musk still decides to make a deal, some new option will appear on the negotiating table, the analyst said.
Elon Musk is Tesla’s chief executive and has already sold a large chunk of his shares in the electric car maker to fund the takeover of Twitter.
He sold $8.5 billion worth of Tesla shares and planned to borrow another $12.5 billion against his shares, although that amount was later reduced to a $6.5 billion loan.
Tesla’s share price plummeted after Musk said he wanted to buy Twitter due to market fears that he would have to sell more shares.
But after Musk wrote that the deal was on hold, Tesla’s share price jumped 6.7% in pre-market trading.