Tesla CEO on Friday said that the deal between him and Twitter where he’s buying the platform for $44 billion is now on hold temporarily. The hiccup in the deal has taken place due to pending details from Twitter’s side, regarding the spam/fake accounts on the microblogging platform.
In a tweet, Musk said: “Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users“. He said so while quoting a story from the Reuters. On Musk’s part, this could result in a loss as if a high proportion of Twitter users don’t actually exist, then the value at which Musk offered to buy Twitter doesn’t sit justified.
In a filing earlier this month, Twitter had estimated that false or spam accounts represented fewer than 5% of its monetizable daily active users during the first quarter. The disclosure came days after Musk’s tweet said that one of his priorities following the Twitter takeover would be to remove “spam bots” from the platform.
Twitter said in the filing that it faced several risks until the deal with Elon Musk is closed, such as whether advertisers would continue to spend on Twitter and “potential uncertainty regarding our future plans and strategy”.
Twitter was targeting $7.5 billion in annual revenue and 315 million daily users by the end of 2023, but withdrew those goals in its recent earnings report. Moreover, current CEO of Twitter, Parag Agrawal recently also said that Twitter is putting a halt on most hiring and review all existing job offers to determine whether any of those “should be pulled back”.
For those unaware, it was confirmed in late April that Twitter will be acquired by Elon Musk at an earlier proposed offer of $54.20 per share in cash in a transaction valued at approximately $44 billion, which was also his “best and last” offer.