LONDON (AP) — Elon Musk said Friday that his plans to buy Twitter for $44 billion are “on hold” as he tries to pinpoint the exact number of spam and fake accounts on the social media platform is another turning point in signs of internal turmoil regarding the proposed acquisition.
In a tweet, the Tesla billionaire linked to a May 2 Reuters report on Twitter’s quarterly report estimating that fake or spam accounts were “monetizable” in the company’s first quarter. of daily active users” accounts for less than 5%.
“The Twitter deal is on hold pending details in favor of calculating that spam/fake accounts do represent less than 5% of users,” Musk said, skeptical that the number of fake accounts is so low.
It’s unclear if the issue will be a deal breaker. Shares of Twitter and Tesla both moved sharply in opposite directions, with Twitter down 18% and Tesla, which Musk had proposed to fund the Twitter deal, up 5%.
Musk has sold more than $8 billion worth of Tesla stock to fund the acquisition.
Wedbush analyst Dan Ives, who follows Tesla and Twitter, said Musk’s “weird” tweets will lead Wall Street to either think the deal may fall apart or that Musk is trying to negotiate lower prices The deal price, or he just forgoes processing the $1 billion fine.
“Many would see this as Musk using this Twitter file/spam account as a way to get out of the deal in a rapidly changing market,” Ives wrote.
He added that Musk’s use of tweets rather than financial documents to announce the news was disturbing and “turned the whole deal into a circus show with many questions and no specifics about the future path of the deal. Answer.”
Investors have had to weigh the legal issues facing Musk and the potential distraction of the world’s most valuable automaker by acquiring Twitter.
Musk’s tweet came a day after the social media company fired two senior executives. Twitter said the company is suspending most hiring except for key roles and “cutting non-labor costs to keep us accountable and efficient.”
In a memo sent to employees and confirmed by Twitter, CEO Parag Agrawal said the company has yet to hit growth and revenue milestones after the company began “aggressively” investing to expand its user base and revenue.