Musk puts $61b Twitter takeover on hold, sending stock plunging

NEW YORK • Tesla chief executive Elon Musk put his US$44 billion (S$61 billion) takeover deal for Twitter "temporarily on hold" yesterday while he awaits data on the proportion of its fake accounts, sending the shares in the social media platform plunging.

Twitter shares fell 17.7 per cent to US$37.10 in pre-market trading, their lowest level since Mr Musk disclosed his stake in the company in early April and subsequently made a "best and final" offer to take it private for US$54.20 per share.

Meanwhile, Tesla shares, against which Mr Musk has secured US$6.25 billion in funding for the acquisition, were up about 5 per cent.

"Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users," Mr Musk told his more than 92 million Twitter followers yesterday.

In his latest tweet, Mr Musk referred to a Reuters story from May 2 that said Twitter had estimated that false or spam accounts represented fewer than 5 per cent of its monetisable daily active users during the first quarter this year, when it recorded 229 million users who were served advertising.

"This 5 per cent metric has been out for some time. He clearly would have already seen it... So it may well be more part of the strategy to lower the price," Ms Susannah Streeter, an analyst at Hargreaves Lansdown.

"It's going to be highly frustrating for many in the company given that a number of senior executives have already been laid off," she said.

The implied probability of the deal closing at the agreed price fell below 50 per cent for the first time on Tuesday, when Twitter shares dropped below US$46.75.

Mr Musk, the world's richest man and a self-proclaimed free speech absolutist, had said that one of his priorities would be to remove "spam bots" from the platform. Twitter did not respond to a request for comment. Mr Musk's representatives and his company Tesla were not immediately available for a comment.

REUTERS

Join ST's Telegram channel and get the latest breaking news delivered to you.

A version of this article appeared in the print edition of The Straits Times on May 14, 2022, with the headline Musk puts $61b Twitter takeover on hold, sending stock plunging. Subscribe