Musk fuels doubt over US$44B Twitter bid
Elon Musk sowed new chaos into the market over his takeover bid for Twitter Inc. on Friday, first claiming his offer was “temporarily on hold” and then maintaining he is “still committed” to the deal, sending the social media giant into a tailspin.
The billionaire initially sent an early tweet saying the Us$44-billion deal is pending until he receives more information about the proportion of fake accounts on the social media site, which sent Twitter stock tumbling as much as 25 per cent in premarket trading.
A few hours later he sent another tweet saying he is “still committed” to the deal. Twitter's shares recouped some of their losses, ending the day down 9.7 per cent at US$40.70 in New York, a steep discount to the US$54.20 per share acquisition price.
Musk said he was waiting for details on a recent filing from Twitter that fake accounts on the social media platform contributed less than five per cent of its users. Twitter said in its latest quarterly results “that
the average of false or spam accounts during the first quarter of 2022 represented fewer than 5 per cent of our monthly daily active users during the quarter.”
Twitter said it applied “significant judgment” to its latest estimate, and the true number could be higher.
Fighting fake accounts has been a cornerstone of Musk's bid to reform Twitter.
Doubts have grown in recent days that Musk would be able to pull off his acquisition of Twitter. “There will also be questions raised over whether fake accounts are the real reason behind this delaying tactic,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, “given that promoting free speech rather than focusing on wealth creation appeared to be his primary motivation for the takeover.”