Elon Musk has hit the pause button on his $44bn Twitter deal until the tech mogul gets more information about fake and spam accounts on the social network platform hurting Twitter shares on Friday.
Twitter reported less than 5% of users on its platform are fake and spam accounts in a filing from early May.
Elon Musk tweeted that the deal would be postponed until Twitter can explain the calculations behind the 5% that the platform listed in their filings.
Musk has placed an offer of $54.20 per share for Twitter. However, shares were trading down 10% to $40.6 on the NYSE at the time of writing on Friday as investors feared that the deal would fall through.
Elon Musk responded to a Reuters tweet on Friday that the deal remains intact and that he is simply focused on understanding the justification towards the reported 5% of fake accounts and spam users.
Still committed to acquisition
— Elon Musk (@elonmusk) May 13, 2022
There is no information behind whether Musk thinks the number is inaccurate or any particular concerns regarding the stated figure. There is also no understanding behind why Elon Musk raised the question on the 5% now, when the reports came out almost two weeks ago.
In the filing, Twitter stated that the platform has 229m users who were shown advertising, a key internal metric. Talks of Elon Musk’s bid raised eyebrows for advertisers as questions arose regarding whether advertisers would continue to spend on Twitter.
Twitter said there is “potential uncertainty regarding our future plans and strategy” with regards to Musk’s acquisition of the microblogging platform.
Elon Musk said disabling spam and false accounts from Twitter is an integral part of his bid to acquire the tech giant, as the Silicon Valley mogul has been personally impacted by multiple fake accounts as himself on the platform. The fake accounts used his stature to deceive other users into crypto scams.
Twitter is aware that it could take months to close the deal with Musk, however, he holds the right to leave the deal at any point with the clause of paying a $1bn penalty.