News & Politics

UH-OH: Elon Musk Says Twitter Deal Is ‘Temporarily on Hold’

(AP Photo/Kiichiro Sato, File)

Tesla CEO Elon Musk’s planned purchase of Twitter appears to have hit a snag regarding the number of fake accounts and bots on the platform.

“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users,” Musk posted to his Twitter account early Friday morning.

Musk’s tweet linked to a Reuters story from earlier this month about Twitter’s financial filings that estimate the bogus accounts represent fewer than 5% of the platform’s “monetizable daily active users.” This development suggests that Musk is skeptical of the estimate, and it may impact what he’s willing to pay to purchase the company.

It is not clear yet whether the issue will create an impasse and prevent the deal from moving forward. Musk’s tweet sent Twitter’s stock down 17% before trading opened on Friday to $37.20—well below the $54.20 per share he agreed to pay to buy the company.

Musk’s concerns about Twitter’s true count of fake and spam accounts are valid. Last month we learned that Twitter had overstated the number of true users on the platform in Q4 2021 by 1.9 million.

Wedbush Securities analyst Dan Ives says the implications of Musk’s tweet are significant.

“The implications of this Musk tweet will send this Twitter circus show into a Friday the 13th horror show as now the Street will view this deal as 1) likely falling apart, 2) Musk negotiating for a lower deal price, or 3) Musk simply walking away with a $1 billion breakup fee.”