Elon Musk announced a hold on his takeover of Twitter pending questions about the social media platform’s assessment that 5% or fewer of its accounts are fake.
Posting on Twitter, Musk announced that he was placing the Twitter deal “temporarily on hold” pending details supporting the calculation that spam/fake accounts do indeed represent less than 5% of users.
Following concern that the deal could be falling through, Musk reassured his audience that the deal is still going through and that he remained committed to taking over the platform.
Musk’s $44 billion offer for Twitter has already been unanimously approved by its board of directors, which initially put up a fight. The development, which occurred on Monday morning, comes as Reuters reported that Twitter estimated in a filing on Monday that false or spam accounts represented fewer than 5% of its monetizable daily active users.
Musk’s announcement of a temporary hold on the acquisition of Twitter caused the company’s stocks to plunge by 25% in pre-market trading, prompting many to suggest that the Tesla CEO was not truly intending to buy the company but was instead doing a pump and dump.
Following Musk’s agreement with Twitter to take over the company, he vowed to clean up the platform's problem with fake accounts, which have long plagued the platform with spam, scams, and illegal content designed to drive political misinformation.
Should Twitter’s calculation of the number of spam accounts on its platform prove incorrect, it could severely affect the company’s advertising rates and market value.
Kim Dotcom, the creator of Mega and prolific free speech crusader, informed Elon Musk that he estimated at least 30% of accounts on Twitter are “Fake and spam accounts. Minimum.”
Under the terms of Musk’s agreement with Twitter, if either party backs out of the agreement for any reason, the party that backs out will have to pay the other party a $1 billion termination fee. It would be extremely costly for Musk to renege on his acquisition of the company, even if he stands to gain short-term profits by selling his existing shares in Twitter at a higher cost than when he initially purchased them.
As reported by Rebel News on Thursday, Twitter has halted the majority of hiring as the acquisition takes shape. The move comes as executives flee the social media platform due to their objections to Musk’s stated intent to reinvigorate the platform with pro-free speech policies.