Elon Musk said his $44 billion offer to buy Twitter was “temporarily on hold” until he was able to get more details to confirm that spam and fake accounts represent less than 5 percent of the total users of the social network.
Musk made the announcement in a predawn tweet Friday, the latest chapter in an unfolding corporate drama that has raised questions about free speech online and the ramifications of putting the world’s richest person in charge of a of the most influential social networks. platforms
Musk, CEO of Tesla, has said that ridding the platform of fake accounts, bots and spam would be one of his top priorities after taking office. In his tweet on Friday, Musk linked to a Reuters article published on May 2 about a Twitter regulatory filing that included an estimate of the number of spam and fake accounts.
Twitter shares fell about 20 percent in premarket trading on Friday.
Known for his carefree and sometimes impulsive business style, Musk’s comments raised questions about the future of the deal. In a May 2 regulatory filing, Twitter said it had estimated that less than 5 percent of its users were fake or spam, a figure it had previously disclosed. In the filing, Twitter warned that it had applied “significant judgment” in making the calculation and that “our estimate of fake or spam accounts may not accurately represent the actual number.”
“Many will see this as Musk using these Twitter archive/spam accounts as a way to get out of this deal in a wildly changing market,” Daniel Ives, an analyst at Wedbush, said in a note to investors.
Musk’s surprise Twitter bid has sparked considerable debate about the role of a social media platform in policing what its users say. Twitter has spent years trying to combat hate speech, harassment and other abuse online, but Musk, who has a history of using the platform to attack and belittle critics, has vowed to ease content moderation policies. of the company. On Tuesday, he said he would lift the ban on former President Donald J. Trump.
How Elon Musk bought Twitter
A very successful deal. Elon Musk, the world’s richest man, has capped off what seemed like an unlikely attempt by the famously fickle billionaire to buy Twitter for roughly $44 billion. Here’s how the deal unfolded:
Backing out of the deal could be tricky. The purchase agreement includes a $1 billion fee that Musk would have to pay if he backed out of the deal, though it was unclear how that provision would apply if Musk could prove Twitter’s user numbers were wrong. If Musk’s debt financing is intact, Twitter could also take the billionaire to court to force him to pay the deal.
Musk has pledged to use a sizable amount of his personal fortune to fund the Twitter deal, a plan that has been hit by a recent drop in share prices, including that of Tesla. Tesla shares have fallen nearly 30 percent in the last month. Musk is selling Tesla shares and putting them up as collateral for personal loans to raise cash.
If a deal were to close, any trouble on Twitter could force Musk to use more of his shares in the electric-car maker to plug potential financial holes. And any issues at Tesla that caused his shares to drop enough could trigger clauses in Musk’s personal loans that would force him to add more collateral, limiting his ability to invest in Twitter.
Musk’s offer has created uncertainty within Twitter, a company already struggling to add users and generate more revenue. On Thursday, Twitter CEO Parag Agrawal fired two top executives, halted new hires and vowed to cut expenses.