Elon Musk has suspended the purchase of Twitter
Loading playerOn Friday Elon Musk said he had “temporarily suspended” operations to complete the Twitter purchase, pending clarification on the number of fake accounts and active bots on the social network.
The suspension decision was made after Twitter published a May 2 report saying that fake or bot-related accounts accounted for less than 5 percent of total daily active users in fiscal first quarter of 2022. On Friday Musk asked Twitter to provide more details on the matter and hinted that he wants to see the documents with the calculations made by the company before continuing the operations for the purchase: if the fake accounts are more than Twitter estimated, it means that the platform's earnings prospects need to be reviewed.
Musk, a well-known US entrepreneur who owns Tesla and SpaceX, had announced plans to buy Twitter in mid-April, and his offer of about $ 44 billion ($ 54.20 per share, about € 41 billion) had been accepted on April 25 by the company's board of directors.
Twitter deal temporarily on hold pending details supporting calculation that spam / fake accounts do indeed represent less than 5% of usershttps: //t.co / Y2t0QMuuyn
– Elon Musk (@elonmusk) May 13, 2022
The difficulties in the Twitter purchase operation had already been talked about for several days. Various US newspapers had speculated that Musk was rethinking the offer made in April, largely covered by a series of loans from banks and investors, and many analysts had judged it no longer sustainable due to the difficult situation of the world financial markets: In recent weeks, Twitter's stock has dropped by $ 9 billion compared to Musk's offer, making the offer very high for current market conditions.
In recent days, some rumors have also circulated that the US commercial authorities are investigating the purchase: although there is nothing confirmed, the spread of these rumors has further scared investors.
Immediately following the announcement of the temporary suspension, Twitter's stock plummeted 19 percent, while Tesla's stock rose 5 percent.
It is not clear what will happen now, if the suspension will remain temporary or if the Twitter purchase risks being permanently canceled: in a subsequent tweet, Musk wrote that he was still determined to buy Twitter. According to the agreements made with the board of directors of the company, if Musk decides to withdraw from the deal he would have to pay a penalty of one billion dollars.