Elon Musk Holds Twitter Deal

Elon Musk tweeted early Friday that his $44 billion bid to purchase Twitter was on pause for the time being. He might be opening the door for renegotiation and raising doubts about his efforts to take the social media network private.

In a filing on Monday, Twitter Inc (TWTR.N) estimated that bogus or spam accounts accounted for less than 5% of its monetizable daily active users during the first quarter.

The social media business offered to advertise to 229 million users in the first quarter.
The announcement comes only days after Tesla Inc (TSLA.O) CEO Elon Musk, who has agreed to acquire Twitter for $44 billion. He stated that one of his first goals would be eliminating “spam bots” from the network.

In the statement, Twitter stated that it faced various risks until the agreement with Musk was completed. It includes whether advertisers would continue to spend money on Twitter and “possible ambiguity over our future intentions and strategy.”

Some analysts read Musk’s move as an attempt to drive Twitter back to the negotiation table to secure a better price as tech stocks cool or to find a way to exit.

“Unless Twitter massively misreported data — which would be a severe security crime,” said Stefano Bonini, a corporate governance specialist at Stevens Institute of Technology. “In any case, this demonstrates that we are still a long way from this deal becoming a reality.”

Musk holds a significant share in Tesla and has pledged billions of dollars of his personal money to support the acquisition. The price hike on Friday allowed Musk to reclaim part of his net worth while simultaneously lowering the value of the company he is attempting to acquire.

The Twitter stock plunged about 10% on Friday, while Tesla stock increased nearly 6%. Investors in Tesla, led by Musk, have expressed anxiety about the billionaire using his share to pay for the Twitter acquisition.

According to legal experts and people close to the deal, Musk’s cold feet over the possibility that there are more spam bots than he thought maybe an attempt to trigger a clause in the contract that allows the deal to be called off if an unforeseen event significantly harms Twitter’s business prospects.

Sumir Acharya

As an Information Management graduate, I maintained my interests in finance, marketing, and technology close at hand. While pursuing SEO and Digital Marketing as my forte, I write about tech blogs, companies, and marketing techniques.

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