Twitter shares plunged Friday morning in pre-market trading after Elon Musk’s announcement said his deal to buy the social media company is “on hold” until he gets more information on the number of fake and spam accounts on the platform.
Here are some key facts
Musk, whose offer to buy Twitter for $44 billion was accepted by the company’s board in April, said the takeover deal was “temporarily on hold” amid concerns over the number of fake and spam accounts on the site.
The billionaire said he was waiting on details supporting the company’s calculation that fake or spam accounts made up less than 5% of its users.
After the announcement, Twitter shares plunged 25% in premarket trading.
The Key Background
Musk has previously said removing spam and fake accounts from Twitter will be one of his “top” priorities. Twitter believes these accounts represent less than 5% of all daily active users. However, Twitter has had a long history of making maths mistakes in this area. It even incorrectly counted the daily users for three consecutive years. The pause is the latest setback in Musk’s acquisition plans, which faced initial opposition from the board and have yet to be finalized. Musk is being investigated by the Securities and Exchange Commission for failing to report his large share in Twitter, which a shareholder also sued him.
Musk’s announcement comes less than a day after Twitter announced the shock departure of two high-level executives, a hiring freeze and cost cutting measures, partly for missing audience and growth targets.
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Tesla. The shares of the electric vehicle manufacturer that Musk co-founded jumped almost 6% on Friday morning after the announcement. The value of Tesla stock has shifted dramatically in response to other developments regarding Musk’s Twitter deal.
Twitter claims that spam and fake accounts account less than 5% (Reuters).
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