Musk Twitter
FILE - CEO Elon Musk departs from the justice center in Wilmington, Del., Tuesday, July 13, 2021. 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. The announcement that the Tesla billionaire tweeted Friday, May 13, 2022 is another twist amid signs of internal turmoil over his planned buyout of Twitter. (AP Photo/Matt Rourke, File)
tech

Elon Musk says Twitter deal 'temporarily on hold'

28 Comments
By KELVIN CHAN

Elon Musk said Friday that his plan to buy Twitter for $44 billion 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 internal turmoil over the proposed acquisition.

Musk, who has been vocal about his desire to clean up Twitter's problem with “spam bots” that mimic real people, appeared to question whether the company was underreporting them.

In a tweet, the Tesla billionaire linked to a Reuters story from May 2 about a quarterly report from Twitter that estimated false or spam accounts made up fewer than 5% of the company’s “monetizable daily active users” in the first quarter.

“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users,” Musk said, indicating he’s skeptical that the number of inauthentic accounts is that low.

It wasn’t clear whether the issue could scuttle the deal. Stock in both Twitter and Tesla swung sharply in opposite directions, with Twitter’s stock tumbling 18%, and shares of Tesla, which Musk had proposed using to help fund the Twitter deal, jumping 5%.

Musk has already sold off more than $8 billion worth of his Tesla shares to finance the purchase.

Wedbush analyst Dan Ives, who follows both Tesla and Twitter, said Musk's “bizarre” tweet will lead Wall Street to either think the deal is likely falling apart, Musk is attempting to negotiate a lower deal price, or he is simply walking away from the deal with a $1 billion penalty.

“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,” Ives wrote.

He added that the Musk's use of Twitter rather than a financial filing to make the announcement was troubling and “sends this whole deal into a circus show with many questions and no concrete answers as to the path of this deal going forward.”

Investors have had to weigh legal troubles for Musk, as well as the possibility that acquiring Twitter could be a distraction from running the world’s most valuable automaker.

Musk’s tweet comes a day after the social media company fired two of its top managers. Twitter said the company is pausing most hiring, except for critical roles, and is “pulling back on non-labor costs to ensure we are being responsible and efficient.”

In a memo sent to employees and confirmed by Twitter, CEO Parag Agrawal said the company has not hit growth and revenue milestones after the company began to invest “aggressively” to expand its user base and revenue.

AP Business Writer Michelle Chapman in New York contributed to this report.

© Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

©2022 GPlusMedia Inc.


28 Comments
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A lot of super-wealthy people posting today. Ha!

3 ( +3 / -0 )

Woah turns out that Musk is a lying charlatan again, who could have guessed? Except for anyone with two brain cells.

Well, he loves to keep the people on edge, the deal will eventually go through. Just need to weed out all of those fake accounts and then it's a full GO.

Twitter has nothing to do with freedom of speech,

Yes, it does, because if it didn't then a ton of conservatives would still be on the platform. The Ayatollah is less dangerous than Trump or MTG? Seriously? It has EVERYTHING to do with FREE SPEECH!

and Musk doesn’t care about freedom of speech in any event.

Then he wouldn't have purchased Twitter.

3 ( +5 / -2 )

“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users,” Musk said, indicating he’s skeptical that the number of inauthentic accounts is that low.

Seems like a reasonable calculation to make.

Yes the so called liberals ( fake liberalism ) will do anything to stop him buying it...

Which has nothing to do with the talking point partisan hackery that follows Musk related content.

Define real "liberalism". Classical liberalism? The neo-liberal market ideology shared by most on both sides of the political divide when presented with a "choice" in a representative democracy?

The "libs" used by conservative pundits for progressive social issues? probably the latter but I doubt the people who use the term even realize what they are referring to.

2 ( +8 / -6 )

@Desert Tortoise

Right on spot.

@Peter Neil

He’s got enough on his plate with SpaceX and Tesla. Why would he screw around with Twitter?

Why would anyone want to screw around with Twitter:

https://www.statista.com/statistics/274563/annual-net-income-of-twitter/

Over the last 12 years did Twitter make money only in 2019 and 2020.

Questions are also asked on whether Twitter can continue to grow or not.

https://www.statista.com/chart/10460/twitter-user-growth/

Over the last decade (and until Trump became president in 2016), did I stop reading articles asking whether Twitter was still "a thing" and pertinent in the age of constant newsfeed. Now that Trump is not president anymore, do new kids on the block like Tik Tok, Instagram or regional services like Line ask again the same question.

2 ( +2 / -0 )

Due diligence is normal, if not usually quite so public.

I don't think Musk is 'buying Twitter' so much as leading a purchase, largely funded by banks, hedge funds etc. Banks and hedge funds don't care about free speech, but about profitability.

I doubt the penalty could be levied if information produced by Twitter was found to be inaccurate.

2 ( +2 / -0 )

Yes the so called liberals ( fake liberalism ) will do anything to stop him buying it...

If Twitter is free and open then people will see the truth ...

1 ( +9 / -8 )

Because freedom of speech is much more important than SpaceX or Tesla.

Twitter has nothing to do with freedom of speech, and Musk doesn’t care about freedom of speech in any event.

1 ( +7 / -6 )

@Farmboy, great article. Mr. Musk is so full of himself and he thinks his companies are so big an important he can do as he wishes while basically daring any level of government to stop him.

1 ( +2 / -1 )

I predicted here a week or two ago he may very well back out of the deal. The amount of stock he has to sell to afford to buy Twitter is driving Tesla's stock prices down, leading to stockholder anger. He can possibly borrow against his stock options but Tesla imposes a limit on this. Mr. Musk already has significant borrowing against his options so he many not be able to borrow more, or borrow enough to finance the Twitter purchase before hitting the limit, forcing him to sell stock to raise money. He has supposedly sold $8 billion in stock but needs to raise I believe half the $44 billion necessary to buy Twitter. But as he sells the value falls. The sight of the company founder unloading that much stock isn't going to inspire confidence in Tesla on the broader market. On top of that the stock options he already borrowed against could cause a margin call if Tesla's stock price falls below a certain level, and the banks are not saying what that level is. If Tesla's stock price falls too low the banks could call those loans, forcing Mr. Musk to sell still more stock, further lowering the stock's value. In the end he may not have the means to complete the deal.

0 ( +6 / -6 )

The Twitter thing was just a ruse to sell stock since he isn’t very liquid. He needed a reason.

He’s got enough on his plate with SpaceX and Tesla. Why would he screw around with Twitter?

0 ( +5 / -5 )

Woah turns out that Musk is a lying charlatan again, who could have guessed? Except for anyone with two brain cells.

0 ( +5 / -5 )

If Twitter is free and open then people will see the truth ...

What is “the truth”? As a reminder, truth requires evidence.

0 ( +5 / -5 )

”Hey, this company Twitter has burned through $2 billion in 10 years. Let’s invest in it!”

0 ( +2 / -2 )

Musk is manipulating the market for personal gain. That's illegal and the SEC should go after him for doing this.

There's a reason that many buyouts of public companies are announced AFTER the deal has been made. Musk didn't learn this, because he wanted to cause the stock to fluctuate wildly. With stocks, we can make money when it rises or when it falls. Just need to be positioned correctly. 30% in a month is a tidy profit.

I'm only anti-Musk when it comes to violating SEC rules and his belief that 100% freedom of speech should be allowed. 5 yrs ago, I though freedom of speech should be absolute, but then I learned that about 50% of Americans are extremely gullible and will believe dumb lies. We seen a few of those in posts here daily, from all political spectrums..

0 ( +0 / -0 )

Elon Musk said Friday that his plan to buy Twitter for $44 billion 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 internal turmoil over the proposed acquisition.

It's a lot - but that's well-known already

Why is he acting like it's new news

Is he looking for an excuse to back out of the deal

0 ( +0 / -0 )

The "libs" used by conservative pundits for progressive social issues? probably the latter but I doubt the people who use the term even realize what they are referring to.

So many words like that have been twisted up by Orwellian pukes into epithets for bullies to use. t's disgusting how our language gets so mangled. War is peace. Freedom is slavery. Pink is blue.

0 ( +0 / -0 )

Oh, and Musk cannot walk away by simply paying a $1 billion break up fee. That comes with conditions such as an outside issue prohibiting the sale. He also can't use it as a tactic for a lower price. He'd be liable for billion more.

-1 ( +0 / -1 )

Hmm, is 'Buyer's Remorse' starting to eat at élan already? Maybe he is beginning to realize that his judgement, while enviable, is not 100%...

-1 ( +3 / -4 )

Twitter stock dropped more than 9 percent while the broader market rose. If Musk pulls out of the deal (if that’s possible), it might be a wild ride for shareholders.

-1 ( +0 / -1 )

Yahoo has an interesting article on the legality of this tweet.

https://finance.yahoo.com/news/elon-musk-invited-legal-scrutiny-by-tweeting-doubts-twitter-bid-211555141.html

-1 ( +0 / -1 )

 I though freedom of speech should be absolute

Here is the problem with that statement. The 1st Amendment prohibits any level of government from a-priori censorship or from banning the expression of opinions. You can criticize government, religion or anything else and the government cannot prevent you from doing so. But the 1st Amendment also means the government cannot control the press. Take any newspaper, radio or TV station. Many have a political alignment. That is their 1st Amendment right in the US. You can write a letter to the editor critical of something the newspaper said, or critical of some politician or proposed law the newspapers editorial board supports and that newspaper is under no obligation to print your letter. Many do for the sake of being perceived as "balanced" but they are not obliged to and the reality is that only a very small proportion of letters ever get published. The newspaper has complete editorial control of its content and that control is a right protected by the 1st Amendment. Yet some like apparently you think a private company like Twitter or Farcebook is somehow obliged by this notion of free speech to publish every comment made. No, it doesn't work that way. Just like the newspaper they have control over the content of their platform and have every right to publish or not publish any point of view they like. The nice thing about the 1st Amendment is it protects the right of the other side to form their own media and publish their own opposing point of view. But the 1st Amendment does not oblige a private firm or corporation to publish content that it objects to. That would in fact violate the 1st Amendment.

-1 ( +0 / -1 )

Is he looking for an excuse to back out of the deal

No. He is trying to cause Twitter stock price to fall so he can negotiate a lower price to close the deal. If this can be proven then he could go to jail but he is both arrogant and overconfident enough to think the SEC and the courts won't touch him. He will likely paint any attempt to investigate or prosecute him as political persecution.

-1 ( +0 / -1 )

Just waiting for him to tweet a trollface.

-2 ( +4 / -6 )

I’m pretty sure it’s linked to the crypto crash. He’s takes a huge gut punch this week.

-2 ( +0 / -2 )

$42.00 per share is the price considering all the fake accounts, workers who threaten to quit, threatened lawsuits and users who threaten to move to Canada (but wont).

will be a lot of work to find all the algorithms and correct them. Need to hire competent people who won’t subvert that progress from within.

-2 ( +2 / -4 )

Why would he screw around with Twitter?

Because freedom of speech is much more important than SpaceX or Tesla.

-3 ( +6 / -9 )

I’m pretty sure this whole thing was so Musk could punk republicans to get some attention.

-4 ( +0 / -4 )

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