Elon Musk Temporarily Suspends Twitter Buyout, Pulls Stock Price Down

Elon Musk has decided to suspend the Twitter acquisition process, as analysts had mentioned earlier this week .

Elon Musk cast doubt on his desire to buy Twitter by announcing on Friday that he was provisionally suspending his acquisition pending details on the proportion of fake accounts on the platform. But then he claimed that he remained “committed” to completing the deal, with the market wondering what his true intentions were.

Twitter’s stock, listed on the New York Stock Exchange, limited its losses by giving up about 10% in electronic trading before the Wall Street open, after plummeting 25% after the announcement of the suspension. of the purchase. “The agreement on Twitter is temporarily suspended pending details that support the calculation that fake accounts effectively represent less than 5% of users,” he tweeted this Friday on his own account, where he has 93 million followers.

Musk, the world’s richest man, made rooting out fake accounts and user transparency central to his purchase of the social network, for which he offered $44 billion last month. When the deal was announced in late April, he said he wanted to make the social network “better than ever,” “defeating spam bots and authenticating all humans.”

Reliable figures on the number of users are considered vital to assess future revenue streams. But this Friday it posted a link to a May 2 article that referenced Twitter’s latest filing with US regulators.

“Horror Show”

The filing said that an internal review had concluded that Twitter had 229 million “monetizable daily active users” in the first quarter of this year, and that only 5% were considered fake or spam accounts.

Wedbush analyst Dan Ives said Twitter’s “circus sideshow” could turn into a “Friday the 13th horror show.” Wall Street investors may interpret the tweet as an attempt by Musk to withdraw from the deal or try to force a lower price, Ives said.

“Musk’s takeover of Twitter was always meant to be a bumpy road, and now it risks slipping,” said analyst Susannah Streeter of Hargreaves Landsdown. According to her, the number of spam and fake accounts – and, conversely, the number of real accounts – is a key figure because future sources of income will depend on advertising or paid subscriptions.

Friday’s announcement sent Twitter’s stock down 20% in pre-opening Wall Street electronic trading to just over $36, well below the billionaire’s proposed $54.2 per share.

“False and misleading”

Musk is the head of Tesla and SpaceX and is worth an estimated $240 billion, according to Forbes. But his management style has often gotten him into trouble with the authorities.

He has been dealing with legal trouble since he tweeted in 2018 that he had sufficient funds to take Tesla public, a claim a judge ruled last month was “false and misleading.” The possible administration of his social network has had stumbling blocks since the purchase attempt was made public.

The tycoon has stated his position in favor of minimizing content moderation and reinstating Donald Trump as a user. The former US president was banned from Twitter and other social networks after the assault on the US Capitol on January 6, 2021.

Activist groups responded by urging advertisers to boycott the platform if Musk opened the doors to abusive and misinformation posts. AFP.