Elon Musk Stops Twitter Takeover Deal Temporarily; Shares Plunge 18%
Elon Musk has announced that the Twitter takeover deal has been put on hold pending details on fake accounts.
The Tesla boss was set to buy the social media giant in a $44 billion deal.
Twitter’s stock crashed by 18% following the billionaire’s announcement.
Elon Musk announced on Friday that the Twitter takeover deal has been put on hold. The billionaire said that he wants Twitter to provide more information about the number of fake accounts on the platform before proceeding with the deal.
Following the news, the social media company’s stocks crashed by 18%. According to Yahoo Finance, Twitter shares are currently trading at $37.94 per unit.
Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of usershttps://t.co/Y2t0QMuuyn
— Elon Musk (@elonmusk) May 13, 2022
The shocking announcement comes after Musk had agreed to a $44 billion deal for the social media platform. The billionaire had previously revealed that one of his main priorities will be to get rid of spambots on the platform. The billionaire also promised to promote free speech for all users.
Even before the Tesla CEO’s announcement on Friday, the company’s market value has been on a decline, falling over $9 billion beneath the offer price. In a filing earlier this month, Twitter estimated that spam and fake accounts constitute less than 5% of its total active users.
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The world’s richest man now wants the company to confirm this before he progresses with the deal. Musk’s Twitter takeover bid is currently being funded partly by Oracle founder, Larry Ellison and venture capital firm, Andreessen Horowitz.
It will be recalled that during the negotiations for the deal, both Twitter and Elon Musk agreed that any party that pulls out would have to pay the other $1 billion in compensation.