Elon Musk said Friday was temporarily terminating its long-awaited Twitter buyout deal, causing the social media giant’s stock to plummet.
Musk, the richest man in the world and founder of the automaker Tesla, had made eliminating spam accounts and bots one of the cornerstones of his proposed $ 44 billion Twitter acquisition.
When the deal was announced in late April, he said he wanted to make Twitter “better than ever” by “defeating spam bots and authenticating all humans.”
But on Friday he wrote: “The Twitter deal is temporarily suspended pending details to support the calculation that spam / fake accounts actually represent less than 5% of users.”
Two hours after his first tweet, Musk returned to the platform to say he was “still busy with the acquisition.”
Reliable data for the number of users is considered vital for judging future revenue streams.
Twitter did not immediately respond to AFP’s request for comment.
– ‘Horror show’ –
In his tweet, Musk linked to a May 2 article referencing Twitter’s latest filing to US regulators.
The filing stated that an internal review concluded that Twitter had 229 million “monetizable daily active users” in the first quarter of this year and only five percent were considered fake or spam accounts.
Wedbush analyst Dan Ives said Twitter’s “circus show” would likely translate into a “Friday the 13th horror show.”
“The nature of Musk creating so much uncertainty in a tweet (and not a repository) is very concerning,” he said.
Wall Street investors are likely to interpret the tweet as an attempt by Musk to pull out of the deal or force a lower price, Ives said.
Market analyst Susannah Streeter of Hargreaves Landsdown said the takeover bid has been bumpy but now “in danger of skidding.”
The initial announcement on Friday saw Twitter shares drop 20% in initial electronic trading prior to the Wall Street opening, but Tesla shares rose.
– ‘False and misleading’ –
Musk is the boss of both Tesla and SpaceX and is estimated to be worth $ 240 billion, according to Forbes.
But his proprietary style – and particularly his use of Twitter – has often put him in hot water with the authorities.
He has been embroiled in legal trouble since tweeting in 2018 that he had enough funds to deprive Tesla, a claim a judge last month found “false and misleading.”
His potential management of the social media platform has hit several hurdles since the takeover attempt was made public, not least for the future status of Donald Trump.
The former US president was expelled from Twitter and other social networks following the attack on the US Capitol on January 6, 2021.
On Wednesday, Musk said he would be willing to lift a ban on Trump’s account.
Activist groups responded by urging advertisers to boycott the platform if Musk opened the door to offensive and uninformative posts.