Elon Musk tweeted that his $44 billion acquisition of Twitter Inc. is “temporarily suspended” until the billionaire receives more information about the proportion of fake accounts.
Twitter is down 20% in premarket trading after Musk tweeted on Friday that the deal has been put on hold, awaiting details on a recent Twitter filing that fake accounts on the social media platform contributed less than 5% of its users. Tesla Inc shares. rose by about 5%.
Twitter said in its latest quarterly results “that the average of fake or spam accounts during Q1 2022 represented less than 5% of our monthly daily active users during the quarter”.
Fighting fake accounts has been one of Elon Musk’s main goals in reforming Twitter. In a statement announcing his deal to buy the social network last month, he revealed that he wanted to eliminate spam bots, authenticate all humans and make his algorithms open source. Musk also said that he would like to make the platform a bastion of free speech, taking the barriers out of content moderation.
Bots are currently allowed on Twitter, although according to company policy, these accounts must indicate that they are automated. The platform even launched a label for “good” bots, such as @tinycarebot, an account that tweets self-care reminders. Spam bots, however, are not allowed, and the company has policies designed to combat them.
Doubts have grown in recent days that Musk would be able to carry out his takeover of Twitter and that the entrepreneur might consider lowering his bidding price for the microblogging site.
The spread on the deal, which provides an indication of how much Wall Street believes the acquisition will be completed, widened further on Thursday to $9.11 from $8.11 in the previous session. That was the broadest level since the billionaire launched his bid last month to buy Twitter for $54.20 — and double that of last week, when he announced a funding commitment of roughly $7.1 billion.
Musk’s latest tweet came just hours after news broke that Twitter was freezing hiring as part of pre-deal cost-cutting efforts. Two of Twitter’s top leaders are also leaving. Kayvon Beykpour, head of consumer products, and Bruce Falck, in charge of revenue products, were asked to leave the company by CEO Parag Agrawal, the two executives in separate public offices said.
The changes reflect Twitter’s current state of limbo as it awaits a new owner. Hindenburg Research LLC, an investment research firm that focuses on activist short selling, said on Monday it sees a “significant risk” that Musk’s proposed offer will be revalued lower.
Analysts cited the ongoing collapse in tech stocks, Twitter’s poor first-quarter results, including the reaffirmation of several years of user numbers, and the prospect that Musk will sell his 9% stake if the deal doesn’t go through. .
In addition to doubts about the extent of spam bots on the Twitter platform, the richest person in the world is still working to secure funding. Musk is in talks with investors to raise sufficient capital and preferential financing for his proposed takeover of Twitter to eliminate the need for any margin borrowing tied to his Tesla shares, according to people with knowledge of the matter.
He recently touted $7.1 billion in equity commitments from investors including Larry Ellison, Sequoia Capital, Qatar Holding and Saudi Prince Alwaleed bin Talal, with the latter putting his Twitter shares in the deal.
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This article is a translation of the article for the website AdAge.
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