Elon Musk Puts $44 Billion Twitter Deal 'On Hold' [Updated]

[MacRumors]

Elon Musk is putting his $44 billion takeover of Twitter "temporarily on hold" after the company claimed that less than 5% of its users are spam or fake accounts.

The Tesla chief tweeted on Friday that the deal was being frozen while he waited for details backing up Twitter's claim:

"Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users."

Musk linked his decision to a May 2 Reuters report referring to a filing with the US financial regulator, in which Twitter asserted that fake and spam accounts represented less than 5% of its daily average users:

We have performed an internal review of a sample of accounts and estimate that the average of false or spam accounts during the first quarter of 2022 represented fewer than 5% of our mDAU during the quarter. The false or spam accounts for a period represents the average of false or spam accounts in the samples during each monthly analysis period during the quarter. In making this determination, we applied significant judgment, so our estimation of false or spam accounts may not accurately represent the actual number of such accounts, and the actual number of false or spam accounts could be higher than we have estimated.

Following Musk's announcement in April that he was offering to buy Twitter, the Tesla CEO said that he wanted to make the social media platform "better than ever" with new product features that will defeat spam bots and authenticate all humans.

As Friday's story broke, Twitter's share price fell by as much as 25% in pre-market trading, and is currently down around 15%.

Update 4:53 a.m.: In a follow-up tweet, Musk says he is "still committed to the acquisition."

Article Link: Elon Musk Puts $44 Billion Twitter Deal 'On Hold' [Updated]

 

[ewestlund]

So you’re telling me that Elon Musk does, in fact, care about the economics of buying Twitter.

 

[troc]

I think some research into how many people will move to alternative platforms as a result of Musk taking over could be interesting too. Maybe most people are ambivalent about the whole saga but it’s something I’m considering….

 

[NoSoup4U]

Seems like only yesterday Must realized that content moderation was hard.

Oh wait.

 

[DelayedGratificationGene]

This guy Musk is all over the map. Ya keep taking your eye off the ball sir and watch Apple race right past you. They’ve been know to do that I think….

 

[Leon Ze Professional]

Twitter screaming:

 

[Dan From Canada]

I created a twitter account many years ago when they went online.
Over the years Twitter has become nothing but a toxic cesspool of politics, from either side.
Goodbye Twitter. The account has been dead for months and will stay that way.

 

[djcerla]

It’s likely scrapped. Thankfully.

 

[Dan From Canada]

Seems like only yesterday Must realized that content moderation was hard.

Oh wait.

Musk has no problem trying to silence critics of Tesla.
He lives on a one way street.

 

[tyrone841]

So am I getting it right - he now considers to NOT buy it, because Twitter has "only so little fake accounts"?
(my question is genuine, because english is not my 1st language and I really don't get it).

 

[LukeHarrison]

So am I getting it right - he now considers to NOT buy it, because Twitter has "only so little fake accounts"?
(my question is genuine, because english is not my 1st language and I really don't get it).

I think the point is Twitter themselves say there are so few fake accounts, but Elon (and the rest of us, frankly) think that there's many more than that.

 

[LoveTo]

Wonder if he’s having cold feet. How does it matter how many accounts are fake? Once he takes over, he can check and change anything he wants. Doesn’t seem like a substantial reason to put the deal on hold. Or probably there’s some angle I don’t understand.

 

[BradWI]

He probably realized this was a horrible idea and found an out with the fake account argument.

Twitter stock back down, Tesla stock up in pre-market trading.

 

[laptech]

Amongst other things, the valuation of Twitter depends on the the size of it's user base. Every social media service has it's fair share of fake accounts or spam accounts and these accounts are taken into consideration when the size of the userbase is ever discussed. A social media companies worth can be based on the size of it's userbase BUT the userbase has to have 'active real posters' and each one is worth x amount to the company. Every spam or fake account is a negative towards the company which can devalue it's userbase. So, the more spam/fake accounts the company has, the least worth it is. So in Twitters case, it is important that what ever figure they told Musk was spam and fake accounts, they stick to that figure because if that figures turns out to be false then Musk could calim that the valuation of the company is wrong and therefore needs to be adjusted.

 

[raybo]

Wonder if he’s having cold feet. How does it matter how many accounts are fake? Once he takes over, he can check and change anything he wants. Doesn’t seem like a substantial reason to put the deal on hold. Or probably there’s some angle I don’t understand.

It's illegal for a publicly traded firm to overstate its value. If the fake accounts were found to be 15% or 20%, for example, the stock price would be overvalued.

 

[EugW]

So am I getting it right - he now considers to NOT buy it, because Twitter has "only so little fake accounts"?
(my question is genuine, because english is not my 1st language and I really don't get it).

I don't get it either.

 

[George Dawes]

I spent more time blocking rude sexist racist morons than actually tweeting.

Don’t miss the cesspool at all

 

[Danfango]

He’s probably trying to devalue it so he can buy it for less.

Realistically for a turd circling the bottom of the bowl it’s pretty overvalued.

 

[TallGuyGT]

I have been a huge fan of Tesla and SpaceX, but as of late, I could really go without hearing everything this guy says and does. Coming as someone who has zero interest in Twitter.

 

[aknabi]

When you've got Elon net worth you can troll muy grande... I'm sure he was entertained by the world dancing like monkeys on a table based on his whims.

 

[nfl46]

So, they’re waiting even longer for Donnie to return? He’ll be back on Twitter just in time for midterms. Lol. Sad.

 

[Abazigal]

Wonder if he’s having cold feet. How does it matter how many accounts are fake? Once he takes over, he can check and change anything he wants. Doesn’t seem like a substantial reason to put the deal on hold. Or probably there’s some angle I don’t understand.

My guess is Elon is running into trouble raising the necessary funds and is looking for a way to walk away from the deal without “losing face”. Part of the money is going to come from his existing Tesla stock, which I believe to be insanely overpriced, and Tesla stock price has been falling of late.

 

[Kierkegaarden]

It's illegal for a publicly traded firm to overstate its value. If the fake accounts were found to be 15% or 20%, for example, the stock price would be overvalued.

Good point — there will probably be some sort of audit to determine this, and the sale price could be altered accordingly — or he might drop out completely. I’m sure this would have come up at some point during the due diligence period anyway.

 

[TheMacDaddy1]

This guy Musk is all over the map. Ya keep taking your eye off the ball sir and watch Apple race right past you. They’ve been know to do that I think….

What does Apple have to do with Musk buying Twitter?

Or are you referring to the mystical Apple car?

 

[Freeangel1]

I hope he cancels. I think he'll make Twitter worse.

Dont like Tesla Cars either. Once they catch on fire takes a long time to put out a battery acid fire. Just ask a fireman.