In another twist, Elon Musk has said that he's putting his $44 billion Twitter deal on hold. Last month, the Tesla CEO announced that he was buying Twitter for a price of $54.20 per share. The deal stands to make Musk the sole owner of the social media platform, with existing shareholders slated to receive a payout of the aforementioned share price once the deal goes through.
The Twitter deal followed a rollercoaster of events beginning with Musk acquiring a 9.2 percent stake in the company and being offered a board seat, and then rejecting the offer and offering to buy Twitter outright. The Twitter board even considered a so-called "poison pill" strategy to thwart the takeover attempt, before eventually relenting and giving in to the offer. Since then, Musk has been vocal about changes he will bring to Twitter, including promoting free speech, reversing the ban on former U.S. President Donald Trump, and even charging users a fee for using the platform.
Musk has now tweeted that the deal with Twitter is "temporarily on hold," until more details about the number of spam accounts are available. The tweet quotes a May 2 Reuters report about a regulatory filing by Twitter, which estimates that fewer than 5 percent of its daily active users comprise fake or spam accounts. Musk has been vocal about removing spam bots on Twitter, so the report should actually come as good news. However, Musk's tweet indicates that he's still not convinced the numbers are correct. It's unclear what Musk's intentions are at the moment, but it looks like he might be using it as an excuse to get out of the Twitter deal at the last minute.
Is Twitter A Bad Investment For Musk?
Musk could be reconsidering the deal because of the complicated finances involved in sourcing billions of dollars. Musk is selling a chunk of his Tesla shares and using the rest to finance loans to come up with the cash. However, his plans appear to have been hindered by falling share prices. Tesla shares have plunged by 30 percent in the last month, and if Musk needs to make any future investments in Twitter, he'll need to draw on even more of his personal wealth. A New York Times report speculates that if Tesla share prices were to fall further, this might trigger a clause in Musk's personal loans, affecting his ability to invest in Twitter.
Musk's announcement comes just a day after Twitter CEO Parag Agrawal fired two top executives – Head of Consumer Product, Kayvon Beykpour, and Revenue Product Lead, Bruce Falck. The news was announced by Agarwal in an email to staff members (first obtained by The Verge). A reason for the firings wasn't provided, but the email stated that the company didn't hit its "intermediate milestones", and blamed the war on Ukraine as the reason for the global economic climate. The company has also put a freeze on hiring and is cutting down on spending. Twitter has been in a state of limbo ever since the Musk acquisition was announced, with no certainty on future plans and worries about advertisers continuing to spend on the platform. Its stock price has also remained lower than what Elon Musk offered to pay, which has led many to speculate that he might be looking to strike a better deal.
Source: Elon Musk/Twitter, Reuters, NYT, The Verge