Musk says $44 bln Twitter deal on hold over fake account data

Elon Musk tweeted that his $44 billion deal for Twitter was ‘temporarily on hold’ while he waits for data on the proportion of the social media platform’s fake accounts $TWTR

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5/14/2022 8:00:00 AM

Elon Musk tweeted that his $44 billion deal for Twitter was ‘temporarily on hold’ while he waits for data on the proportion of the social media platform’s fake accounts $TWTR

Elon Musk tweeted on Friday that his $44-billion cash deal for Twitter Inc was 'temporarily on hold' while he waits for the social media company to provide data on the proportion of its fake accounts.

Twitter shares initially fell more than 20% in premarket trading, but after Musk, the chief executive of electric car market Tesla IncRegister now for FREE unlimited access to Reuters.comThe spread between the offer price and the value of Twitter shares had widened in recent days, implying less than a 50% chance of completion, as investors speculated that the downturn would prompt Musk to walk away or seek a lower price.

loadingBut this is meant to help him prepare for his ownership of Twitter, not to carry out due diligence and reopen negotiations.Twitter CEO Parag Agrawal also weighed in, tweeting "While I expect the deal to close, we need to be prepared for all scenarios." On Thursday, Agrawal announced leadership changes and a hiring freeze.

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Musk says $44 bln Twitter deal on hold over fake account data

Elon Musk tweeted on Friday that his $44-billion cash deal for Twitter Inc was 'temporarily on hold' while he waits for the social media company to provide data on the proportion of its fake accounts. Read more >>

Elon Musk Puts Twitter Take Over on Hold, Twitter Shares TankUPDATE: elonmusk put his $42 billion takeover of Twitter on hold till it can be verified that the social media site has less than 5% of spam or fake accounts. Musk's tweet sent Twitter shares plummeting to under $39. By OKnightCrypto elonmusk OKnightCrypto Get it now under a discount 😎 elonmusk OKnightCrypto LOL, elonmusk OKnightCrypto In more important news, NATO has surrounded russia in last 48 hours. This may not end well.

Elon Musk says Twitter deal is 'on hold'Twitter shares are taking a hit after Elon Musk said in a tweet that his $44 billion acquisition is temporarily on hold. Elon Musk's not-so-secret weapon: An army of Twitter bots $tsla Classic PUMP and DUMP !!! Love this guy for his stock pics. He opened his position months ago and announced it, sold at 52 and then shorted it last week.. hahahaha nice trade. 👍👍 He's buying Coke first so I can get a TAB

Elon Musk says he's put the blockbuster Twitter deal on pause over fake accountsElon Musk brought more drama to his bid to buy Twitter on Friday, saying the deal was 'on hold' while he investigated the volume of fake accounts on the platform. Experts speculated the move could be a precursor to negotiating down the sale price.

Elon Musk: Twitter deal 'temporarily on hold'Elon Musk says his plan to buy Twitter is “temporarily on hold” as he tries to pinpoint the exact number of spam and fake accounts on the social media platform, another twist amid signs of turmoil over the proposed $44 billion acquisition

Elon Musk says Twitter deal 'temporarily on hold'Elon Musk says his planned $44 billion purchase of Twitter is 'temporarily on hold' pending details on spam and fake accounts on the social media platform. Elon: hey guys, it’s me 💜 you just haven’t heard from me in a few hours, so I needed everyone to know I’m still Heard, I mean, hear, haha j/k, love you all. You all love me, right? 😁 Right? Musk weeks ago: I’m buying twitter so I can fix all this sh*t!” Musk now: “I’m not buying twitter until they fix all this sh*t!”

Elon Musk says Twitter deal 'temporarily on hold'Elon Musk has tweeted that the Twitter deal is temporarily on hold due to the high number of fake accounts. Epic level trolling Is it that weird that people feel the need to talk about subjects with strangers and without leaving a mark? Opinions change, people change. I don’t want people to know who i am and what i said 5 years ago. The internet is a wild west. Its for my own safety. This is a really interesting development as Twitter says less than 5% are fake/spam accounts but has elonmusk's due diligence shown this to be wrong and a much higher number? Could this lead many other issues around Twitter's filings being questioned?

Register now for FREE unlimited access to Reuters.com Register (TWTR.N) was "temporarily on hold" while he waits for the social media company to provide data on the proportion of its fake accounts. Twitter shares initially fell more than 20% in premarket trading, but after Musk, the chief executive of electric car market Tesla Inc (TSLA.O) , sent a second tweet saying he remained committed to the deal, they regained some ground. The shares were down 9.6% to $40.71 in trading on Friday, a steep discount to the $54.20 per share acquisition price. Register now for FREE unlimited access to Reuters.com Register Musk, the world's richest person, decided to waive due diligence when he agreed to buy Twitter on April 25, in an effort to get the San Francisco-based company to accept his "best and final offer." This could make it harder for him to argue that Twitter somehow misled him. Since Musk inked his deal to acquire Twitter, technology stocks have plunged amid investor concerns over inflation and a potential economic slowdown. The spread between the offer price and the value of Twitter shares had widened in recent days, implying less than a 50% chance of completion, as investors speculated that the downturn would prompt Musk to walk away or seek a lower price. read more "Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users," Musk told his more than 92 million Twitter followers. "To find out, my team will do a random sample of 100 followers" of the microblogging site, Musk tweeted, inviting others to repeat the process and "see what they discover." loading "If we collectively try to figure out the bot/duplicate user percentage, we can probably crowdsource a good answer." Musk tweeted he had "relied upon the accuracy of Twitter's public filings" in reply to a follower who asked why he had not thought of this before offering to buy the company. Under the terms of Musk's contract with Twitter, he is entitled to ask the company for information on its operations following the signing of the deal. But this is meant to help him prepare for his ownership of Twitter, not to carry out due diligence and reopen negotiations. Twitter is planning no immediate action against Musk as a result of Musk's comment, people familiar with the matter said. The company considered the comment disparaging and a violation of the terms of their deal contract, but was encouraged by Musk subsequently tweeting he was committing to the acquisition, the sources added. Musk came to Twitter's office for a meeting on May 6 as part of the transaction planning process, a Twitter spokesperson said. Twitter CEO Parag Agrawal also weighed in, tweeting "While I expect the deal to close, we need to be prepared for all scenarios." On Thursday, Agrawal announced leadership changes and a hiring freeze. REAL OR FAKE? 1/2 Elon Musk's Twitter profile is seen on a smartphone placed on printed Twitter logos in this picture illustration taken April 28, 2022. REUTERS/Dado Ruvic/Illustration Read More Spam or fake accounts are designed to manipulate or artificially boost activity on services like Twitter. Some create an impression that something or someone is more popular than they actually are. Musk tweeted a Reuters story from ten days ago that cited the fake account figures. Twitter has said that the figures were an estimate and that the actual number may be higher. The estimated number of spam accounts on the microblogging site has held steady below 5% since 2013, according to regulatory filings from Twitter, prompting some analysts to question why Musk was raising it now. "This 5% metric has been out for some time. He clearly would have already seen it ... So it may well be more part of the strategy to lower the price," said Susannah Streeter, an analyst at Hargreaves Lansdown. Representatives for Musk did not immediately respond to requests for comment from Reuters. Tesla's stock rose 5% on Friday. The shares have lost about a quarter of their value since Musk disclosed a stake in Twitter on April 4, amid concerns he will get distracted as Tesla's CEO and that he may have to sell more Tesla shares to fund the deal. There is plenty of precedent for a potential renegotiation of the price following a market downturn. Several companies repriced agreed acquisitions when the COVID-19 pandemic broke out in 2020 and delivered a global economic shock. For example, French retailer LVMH (LVMH.PA) threatened to walk away from a deal with Tiffany & Co. The U.S. jewelry retailer agreed to lower the price by $425 million to $15.8 billion. Acquirers seeking a get out sometimes turn to "material adverse effect" clauses in their merger agreement, arguing the target company has been significantly damaged. But the language in the Twitter deal agreement, as in many recent mergers, does not allow Musk to walk away because of a deteriorating business environment, such as a drop in demand for advertising or because Twitter's shares have plunged. Musk is contractually obligated to pay Twitter a $1 billion break-up fee if he does not complete the deal. But the contract also contains a "specific performance" clause that a judge can cite to force Musk to complete the deal. In practice, acquirers who lose a specific performance case are almost never forced to complete an acquisition and typically negotiate a monetary settlement with their targets. DEFEAT THE BOTS Musk has said that if he buys Twitter he "will defeat the spam bots or die trying" and has blamed the company's reliance on advertising for why it has let spam bots proliferate. He has also been critical of Twitter's moderation policy and has said he wants Twitter's algorithm to prioritize tweets to be public. This week, Musk said he would reverse Twitter's ban on former U.S. President Donald Trump when he buys the social media platform, signaling his intention to cut moderation. Trump, who started a rival social media app called Truth Social, took to his platform on Friday to weigh in. "There is no way Elon Musk is going to buy Twitter at such a ridiculous price, especially since realizing it is a company largely based on bots or spam accounts," Trump wrote in a post, adding that his site is much better. Register now for FREE unlimited access to Reuters.com Register Additonal reporting by Nivedita Balu and Shivani Tanna in Bengaluru, Ken Li in New York and Katie Paul in San Francisco; Writing by Anna Driver and Editing by Alexander Smith, Nick Zieminski, Alistair Bell and Himani Sarkar Our Standards: The Thomson Reuters Trust Principles. Technology Roundup Sign up to our tech newsletter to get the latest news and trends in the global technology industry. Sign up Subscribe to our newsletter to get all the news you need to start your day. Sign up