Elon Musk Puts Twitter Deal On Hold: Here's Why
Elon Musk's $44-billion plan to acquire Twitter has been temporarily put on hold. This development has been confirmed by Musk himself, who sent out a tweet announcing the same in the early hours of May 13, 2022. Musk's announcement of a decision to review the acquisition plans came days after Twitter talked about spam and fake accounts on the platform in its first-quarter financial report for 2022.
In the filing, Twitter estimated spam accounts to account for 5% of the platform's entire active user base as of the first quarter of 2022. Prima facie, Musk seems to be having trouble taking this number at face value. Interestingly, in the same report, Twitter officials did note that the figure of 5% was an estimate and that they didn't independently verify the number. In the days prior to making the acquisition bid for Twitter, Musk had asserted that cracking down on fake and spam accounts would be a major part of his takeover of Twitter.
In a follow-up tweet made hours after his announcement of putting the acquisition on hold, Musk asserted that he was still committed to the deal. Nevertheless, Musk's early morning tweet thread was enough to cause major upheavals in the pre-market trading sessions and caused Twitter shares to tank 20% before rebounding slightly.
Will he, won't he?
It remains unclear if Musk has taken any official steps to halt the acquisition. Since Musk's $44-billion offer was made public in April, Twitter's stock price has crashed — and as noted by NBC, as of Friday morning Twitter was worth around $35 billion.
These recent developments have led to many people questioning Musk's commitment to the deal, with some even wondering if the deal would even go through. Musk's plan to acquire Twitter was agreed upon by the Twitter board on April 26 after Musk said he would buy the company for $54.20 per share. This offer came at a time when Twitter's shares were trading for less than $50, causing many people to be skeptical about Musk going ahead with his offer.
Elon's newest move comes one day after Twitter CEO Parag Agrawal fired two senior Twitter executives, including Kayvon Beykpour who was the general manager of consumer products — and Bruce Falckwhile, who was the revenue product lead and head of business products. Twitter also confirmed that it was freezing all hiring — except for business-critical posts for the time being.
Needless to say, the newest announcement from Musk only adds another layer of uncertainty over the tech billionaire's eventual plans for Twitter.