Elon Musk says Twitter deal ‘temporarily on hold’
But the billionaire said he is ‘still committed’ to buying the social media giant.
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Elon Musk has said he is “still committed” to his deal to buy Twitter, after revealing on Friday that the takeover is “temporarily on hold” over details around the number of spam and fake accounts present on the site.
The billionaire Tesla owner agreed a £34.5 billion deal to take over the social media giant last month, pledging to improve free speech on the site and remove fake accounts.
But in a tweet on Friday, Mr Musk said the deal is now on hold “pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users”.
He tweeted again two hours later, adding “Still committed to acquisition”.
His original tweet linked to a report published earlier this month which said Twitter estimates that spam and fake accounts comprise less than 5% of its daily users.
Mr Musk has not offered any further details on why this could affect the deal.
One industry expert suggested the business tycoon’s interest in the number of real and fake accounts on the site could be linked to his possible plans to boost Twitter revenue through user subscriptions and advertising.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said these figures are a “key metric” in Mr Musk’s plans for the platform, but said the delay could also be a tactic to try to reduce the price of the deal.
“Musk’s Twitter takeover was always destined to be a bumpy ride, and now it risks hitting the skids over the number of fake accounts on the platform,” she said.
“Twitter’s share price plunged by around 18% in pre-market trading following his tweet indicating the deal was temporarily on hold.
“He is clearly intent on querying the company’s estimate that spam accounts make up less than 5% of active daily users – a key metric given that establishing an accurate number of real tweeters is considered to be key to future revenue streams via advertising or paid-for subscriptions on the site.
“There will also be questions raised over whether fake accounts are the real reason behind this delaying tactic, given that promoting free speech rather than focusing on wealth creation appeared to be his primary motivation for the takeover.
“The 44 billion dollar price tag is huge, and it may be a strategy to row back on the amount he is prepared to pay to acquire the platform.”
Twitter’s share price dropped almost 10% when the US stock market opened on Friday, and in the wake of Mr Musk’s posts, with shares valued at around 41 dollars each – significantly below the $54.20 Mr Musk has agreed to pay per share for the company.
When his proposed takeover was announced in April, Mr Musk said one of his key aims was to “defeat the spam bots”, in reference to the fake and automated accounts operating on the platform.
Mr Musk had also pledged to bolster free speech on the site, and earlier this week reiterated his belief that former US president Donald Trump should have his permanent Twitter ban reversed.