Technology billionaire Elon Musk suspended the purchase of Twitter on Friday. Musk tweeted that he first wanted to wait for calculations to show that accounts without real users are actually less than five percent.
The website released these estimates earlier this week. Twitter shares quickly fell by almost a quarter in pre-market trading following Musk’s tweet, reaching around $ 34.50. The price then rose a bit later to around $ 37. This is far from the $ 54.20 per share that Musk promised shareholders. The newspaper went bankrupt on Thursday at $ 45.08 – a sign of investor skepticism that Musk is actually carrying out the deal.
The fact that there are fake Twitter accounts shouldn’t come as a surprise to Musk. Because as one of his goals when buying on Twitter, he declared that he wanted to block profiles used to send spam messages from the platform. It’s unclear whether Musk could use the accusation that Twitter provided inaccurate numbers of fake accounts to exit the deal or downgrade its offer. He eventually gave up on simply checking books on Twitter before making a deal.
Twitter and Musk have agreed to a $ 1 billion fine if either party cancels the deal. But experts believe that doesn’t mean Musk can just change his mind without explanation and let go of a billion dollars.
The head of electric car maker Tesla has agreed a deal worth around $ 44 billion with Twitter’s management. But he still depends on enough shareholders to sell him their shares. Twitter and Musk previously wanted to complete the acquisition by the end of the year. He has already bought a good nine percent of Twitter’s shares on the stock exchange in the past few months.
There have also been other issues with the transaction in the last few days. Musk originally wanted to borrow about $ 12 billion in purchase price to be backed by his Tesla stock. But after Tesla’s share price plunged from around $ 1,000 to just $ 728, the plan became increasingly unfavorable to him. Bloomberg’s financial service said Musk is looking for other financing options in lieu of an equity-backed loan. (dpa)