It looks like spam accounts could be the reason for a pause on Elon Musk’s $44 billion Twitter deal that has had everyone buzzing. The Tesla CEO revealed that the highly anticipated business deal is on hold just weeks after the pair’s agreement to officially seal the deal, CNN reports.
“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users,” said Musk via the platform today (May 13).
Following the news, Twitter shares plummeted over 20% in pre-market trading just before the stock rebounded. Two hours following the tweet that has everyone confused, Musk confirmed that he is “still committed to acquisition.”
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
Despite previous acknowledgement that they’ve had a spam problem for years, Twitter has also shared that in order for the company to continue to grow, the number of fake and malicious accounts would need to decrease. Given that this has been made known, experts are scratching their heads in reference to Musk’s decision to use this particular example as a reason to put the deal on hold.
“The Street will view this deal as 1) likely falling apart, 2) Musk negotiating for a lower deal price, or 3) Musk simply walking away from the deal with a $1 billion breakup fee,” said tech analyst Dan Ives in a letter to clients earlier today. “Many will view this as Musk using this Twitter filing/spam accounts as a way to get out of this deal in a vastly changing market.”
Experts are also questioning Musk’s choice to announce the decision to halt the deal in a tweet.
“Usually we’d see some sort of filing that would come first, an amendment to previous filings on the deal, that says, ‘We’ve uncovered some information in the process of due diligence and we’re reconsidering our acquisition,'” said Josh White, an assistant professor of finance at Vanderbilt University and a former financial economist for the SEC.
Should he decide to completely pull the deal off of the table, Musk would owe the social media platform $1 billion.
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