Musk brakes Twitter buy

Elon says deal ‘temporarily on hold’ over fake accounts

Elon Musk is pressing pause on his $44 billion Twitter takeover.

“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users,” he tweeted Friday morning, linking to a Reuters article about a filing with the Securities and Exchange Commission, in which Twitter claimed that phony profiles and bots make up just a small fraction of its regular users.

In its latest quarterly review, the social media giant said “that the average of false or spam accounts during the first quarter of 2022 represented fewer than 5% of our monthly daily active users during the quarter.” Twitter added that “it applied significant judgment,” so it’s possible the figure may not be entirely accurate.

“The actual number of false or spam accounts could be higher than we have estimated,” it said. “We are continually seeking to improve our ability to estimate the total number of spam accounts.”

Earlier this month, Twitter revealed that it agreed to sell to Musk (photo) at a cost of $54.20 per share, making him the platform’s new owner, pending regulatory approval by shareholders. At the time, Musk said he was looking forward to “enhancing the product with new features” and “authenticating all humans” on the platform.

In addition to maintaining users’ freedom of speech, gutting fake accounts and spam bots has been a key aspect of the tech billionaire’s bid to reform Twitter. Bots are currently allowed on Twitter, though under the company’s policy such accounts are supposed to indicate that they’re automated.

Bots are nothing new. Wedbush analyst Dan Ives said Wall Street suspects an ulterior motive behind Musk’s tweet.

“The street view is that he’s trying to find an excuse to basically talk down the deal price or walk,” Ives said.

Musk’s Friday tweet sent

Twitter’s stock tumbling 9.7% for the day. Shares of Musk’s Tesla Inc. climbed 5.7%.

After the stock plunge, the SpaceX founder tweeted that he is still “committed to the acquisition.” Share prices recovered slightly in the hours after his follow-up tweet.

The current head of Twitter doesn’t think Musk’s planned purchase will fall apart.

“While I expect the deal to close, we need to be prepared for all scenarios and always do what’s right for Twitter,” CEO Parag Agrawal tweeted Friday afternoon.

Agrawal appeared to be addressing the sale and the company’s hiring freeze that was revealed Thursday.

If he walks away from the deal, Musk, who is currently the richest person in the world, will have to pay a termination fee of $1 billion.