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Elon Musk Puts Twitter Deal On Hold

Elon Musk Dissolves Twitter Board - Becomes Sole Director
Elon Musk has put his $44bn (£35bn) deal to buy Twitter on hold.

Gatekeepers News reports that Musk cited pending details in support of the calculation that spam and fake accounts indeed represent less than 5% of users.

Musk has been vocal about cleaning up spam accounts.

Analysts speculated that he could be seeking to renegotiate the price or even walk away from the takeover.

Twitter shares fell as much as 25% in pre-market trading following  Musk’s tweet, although, he had also tweeted that he is “still committed to acquisition”.

Under the terms of the deal, if either Twitter or Musk walk away they must pay the other side a termination fee of $1bn.

Weeks ago, Twitter reported that fake accounts accounted for fewer than 5% of its daily active users during the first three months of this year.

However, the company said in determining the number of spam accounts, “it applied significant judgment, so our estimation of false or spam accounts may not accurately represent the actual number of such accounts”.

“The actual number of false or spam accounts could be higher than we have estimated. We are continually seeking to improve our ability to estimate the total number of spam accounts,” it said.

Dan Ives, a tech analyst at investment firm Wedbush Securities, said Musk’s tweet would “send this Twitter circus show into a Friday the 13th horror show”.

He said Wall Street would now “view this deal as 1) likely falling apart, 2) Musk negotiating for a lower deal price, or 3) Musk simply walking away from the deal with a $1bn break-up fee”.

Ives said if Musk did still decide to go ahead with the deal, a “clear renegotiation is likely on the table”.

He added many would view him highlighting the number of spam accounts “as a way to get out of this deal in a vastly changing market”.

“The nature of Musk creating so much uncertainty in a tweet (and not a filing) is very troubling to us… and now sends this whole deal into a circus show with many questions and no concrete answers as to the path of this deal going forward.”

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