Musk says deal to buy Twitter ‘temporarily on hold’

NEW YORK: Elon Musk on Friday said that he was putting a temporary halt on his much-anticipated deal to buy Twitter, sending shares in the social media giant plunging.

Musk, the world’s richest man and founder of automaker Tesla, had made the eradication of spam accounts and bots one of the centerpieces of his proposed $44 billion takeover of Twitter.

When the deal was announced in late April he said he wanted to make Twitter “better than ever” by “defeating the spam bots and authenticating all humans”.

Reliable figures for the number of users is seen as vital to judge future revenue streams.

But, on Friday he posted a link to an article from May 2 referencing Twitter’s latest filing to US regulators.

“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5 per cent of users,” he wrote on Twitter.

The filing said that an internal review had concluded Twitter had 229 million “monetisable daily active users” in the first quarter of this year, and just five per cent were regarded as false or spam accounts.

Analyst Dan Ives from Wedbush said that the Twitter “circus show” was likely to translate into a “Friday 13th horror show”.

Wall Street investors were likely to interpret the tweet as an attempt by Musk to pull out of the deal or trying to force a lower price, Ives said.

“Musk’s Twitter takeover was always destined to be a bumpy ride, and now it risks hitting the skids,” Hargreaves Landsdown market analyst Susannah Streeter said.

She said that the number of spam and fake accounts and conversely the number of real accounts was a key metric because future revenue streams would rely on advertising or paid subscriptions.

Friday’s announcement saw Twitter’s shares drop by 20 per cent in early electronic trading before Wall Street opened, but Tesla’s stock was on the rise.

Musk is boss of both Tesla and SpaceX and is estimated to be worth $240 billion, according to Forbes. But his style of ownership has frequently landed him in hot water with the authorities.

He has been tangled in legal troubles ever since he tweeted in 2018 that he had enough funds to take Tesla private, a claim that a judge last month decided was “false and misleading”.

His potential stewardship of the social media platform has hit several bumps since the takeover attempt was made public, not least over the future status of Donald Trump.

The former US president was kicked off Twitter and other social networks following the attack on the US Capitol on January 6, 2021.

On Wednesday, Musk said he would be open to lifting a ban on Trump’s account.

Activist groups responded by urging advertisers to boycott the platform if Musk opened the gates to abusive and misinformative posts.