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Sunday, May 29, 2022

Elon Musk: Twitter deal ‘temporarily on hold’

by Calvin Chan and Tom Criser

DETROIT ( Associated Press) – Elon Musk said Friday that his plan to buy Twitter is “temporarily on hold” as he tries to pinpoint the exact number of spam and fake accounts on the social media platform, at a proposed $44 Another turning point amid signs of turmoil is the Arab takeover.

Musk has been vocal about his desire to clean up Twitter’s problem with “spam bots” that mimic real people and questioned whether the company was undercutting them.

“The Twitter deal temporarily pending details supports the calculation that spam/fake accounts actually represent less than 5% of users,” Musk said, indicating that he suspects the number of unauthenticated accounts is so small. Is.

It was not clear whether the issue could affect the deal. Musk later tweeted that he was “still committed to the acquisition.”

Neither Twitter nor Musk responded Friday to requests for comment.

The problem of fake accounts on Twitter is not hidden from anyone.

In its quarterly filing with the SEC, even Twitter doubted that the number of its bot accounts was accurate, believing that the estimate may have been lower. “In making this determination, we applied significant judgment, so our estimate of false or spam accounts may not accurately represent the actual number of such accounts, and the actual number of false or spam accounts may exceed our estimate.” ,” the filing says.

A review of Twitter filings with the U.S. Securities and Exchange Commission shows that speculation about spambot accounts and similar language expressing suspicion has been in Twitter’s quarterly and annual reports for at least two years, Musk said. before they make their offer and it will be known to them and their advisors.

Sarah Silver, professor of business journalism and financial communication at Quinnipiac University, said Musk appears to be using the number of spam accounts as an excuse to back out of the deal because it is something he is well aware of.

“To claim that this is the reason he is withholding the deal is not credible,” Silver said. “This is not a new issue for him. It is not entering their consciousness yet.”

Stocks in both Twitter and Tesla jumped sharply in opposite directions on Friday, with Twitter stock down nearly 10% and Tesla, which Musk used to help fund the Twitter deal, jumped nearly 6% .

But shares of Tesla, which Musk is selling to fund some of Twitter’s acquisitions, have fallen since it was revealed that the social platform had become a Musk target.

Those shares have lost a quarter of their value in the past month, and have fallen from about $1,150 in early April when Musk confirmed he had taken a major stake in Twitter, to about $762 on Friday.

“So it has become very expensive for them to buy this company using their Tesla shares,” Silver said.

Musk’s net worth has fallen to $223 billion as of Friday, estimated by Forbes earlier this week at $240 billion.

Tesla shares may have also benefited from Twitter bot accounts over the years. A University of Maryland researcher recently concluded that such bots have been used to generate hundreds of thousands of positive tweets about Tesla, potentially boosting its stock in years when it was under pressure. .

Neither Tesla nor its supporters have claimed responsibility for those bots.

Investors have weighed in on legal troubles for Musk, as well as the possibility that Twitter’s acquisition could be a distraction from driving the world’s most valuable automaker. The proposed deal continued to put pressure on Tesla shares, which had already fallen 16% this week.

The sharp jump in the price of Tesla shares ahead of the opening bell on Friday signaled growing doubts that an acquisition of Twitter would take place.

Musk has already sold more than $8 billion in his Tesla shares to finance the purchase.

Originally Musk had committed to borrow $12.5 billion with Tesla stock as collateral to buy Twitter. He will borrow $13 billion from banks and invest $21 billion in Tesla equity.

Last week, Musk consolidated an equity stake in his proposal for Twitter, which included a commitment of more than $7 billion from a diverse group of investors, including Silicon Valley heavy hitters such as Oracle co-founder Larry Ellison. .

According to the filing, the money from new investors reduces the amount borrowed to $6.25 billion on the value of Tesla stock. Tesla’s equity share may increase from $ 21 billion to $ 27.25 billion.

Wedbush analyst Dan Ives, who follows both Tesla and Twitter, said Musk’s “bizarre” tweet is likely to make Wall Street either think the deal will break, with Musk attempting to negotiate a lower deal price. Has been, or is he just walking away deal with a fine of $1 billion.

“Many will see this as a way for Musk to get out of this deal by using his Twitter filing/spam accounts,” Ives wrote.

He said that Musk’s use of Twitter, rather than a financial filing, to make the announcement was disturbing and “sends this whole deal into a circus show with many questions and no concrete answers about the path forward for this deal.” doesn’t give.”

Musk’s tweet comes a day after the social media company sacked two of its top managers. Twitter said the company is halting most hiring except in critical roles, and is “pulling back on nonessential labor costs to ensure we are responsible and efficient.”

In a memo sent to employees and confirmed by Twitter, CEO Parag Agarwal said the company hasn’t hit growth and revenue milestones since it began making “aggressive” investments to expand its user base and revenue. Is.


Chan reported from London. Associated Press Business Writer Michelle Chapman in New York contributed to this report.

World Nation News Deskhttps://www.worldnationnews.com
World Nation News is a digital news portal website. Which provides important and latest breaking news updates to our audience in an effective and efficient ways, like world’s top stories, entertainment, sports, technology and much more news.
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