Elon Musk said that his $44 billion deal to acquire Twitter has been put on hold. The billionaire Tesla chief cited pending details to support the microblogging site’s claim that spam or fake accounts were less than 5 per cent of its total user base.
What has Elon Musk said?
In a tweet Friday, Musk said: “Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users”. He shared a link in his tweet to a May 2 Reuters story titled ‘Twitter estimates spam, fake accounts comprise less than 5% of users -filing’.
The world’s richest man on prior occasions has said that removing “spam bots” from Twitter will be one of his top priorities following the completion of the acquisition.
Earlier this month, the microblogging platform had claimed in a regulatory filing that false or spam accounts represented fewer than 5 per cent of its monetisable daily active users during the first quarter. It also said it faced several risks until the deal with Musk is closed, including whether advertisers would continue to spend on Twitter.
According to Reuters, shares of Twitter fell 20 per cent in premarket trading. Even though Musk did not provide much details in his tweet announcing the deal going on hold, it could cause a flurry in the tech and investment ecosystem.
Why is it important?
While Musk had initially announced that he would take Twitter private by buying it for $44 billion with the help of a loan by Morgan Stanley, he later made a filing saying he has received equity commitment from marquee investment houses including Sequoia Capital, Andreessen Horowitz, Larry Ellison, and others.