MUSK PUTS $44BN TWITTER BID ON ICE
Mogul worried about spam accounts
ELON MUSK caused a sensation yesterday when he said his $44billion deal to buy Twitter was ‘temporarily on hold’.
The world’s richest man revealed the takeover was on ice over concerns about the number of spam accounts on the social media platform.
The shock move led to speculation that Mr Musk is about to walk away from the controversial takeover.
Twitter’s share price dipped to around $40, against the offer price of $54.40, with many of the firm’s investors betting that the deal is off.
Mr Musk, 50, chief executive of the electric car maker Tesla, made the announcement in a tweet, saying he was waiting for information ‘supporting the calculation that spam accounts do indeed represent less than 5% of users’. His tweet referred to a filing on May 2 in which Twitter said its number of spam users represented ‘fewer than 5 of our monetisable daily active users’.
The higher the number of spam accounts, the less money Twitter can make, because it is unable to target these users and therefore make money from them.
Twitter also admitted in the filing that the actual number could be higher because of the way the company calculates spam accounts.
It added: ‘We are continually seeking to improve our ability to estimate the total number of spam accounts.’
Mr Musk bought Twitter in a whirlwind, even waiving his right to carry out due diligence while negotiating the terms of the deal.
But there has been growing concern among investors that the Tesla founder’s bid will not go through thanks to the significant financial and political exposure that is linked to the deal.
He faces a $1billion termination fee if he pulls out of
the takeover.
@elonmusk
Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users