“Twitter transaction on hold temporarily seeking details supporting calculation that spam/fake accounts do indeed comprise less than 5% of users,” Musk tweeted in a tweet. Let us see why is Twitter deal temporarily on hold, and what happened.
Why is Twitter deal temporarily on hold?
Elon Musk, the CEO of Tesla, announced on Friday that his $44 billion Twitter deal had been put on hold seeking specifics on spam and fraudulent accounts.
Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of usershttps://t.co/Y2t0QMuuyn
— Elon Musk (@elonmusk) May 13, 2022
In a filing earlier this month, Twitter calculated that during the first quarter, fake or spam accounts accounted for less than 5% of its monetizable daily active users.
Musk had stated in a tweet that one of his top priorities will be to eliminate “spambots” off the network.
According to the filing, Twitter faces various risks until the Musk purchase is finalized, including whether advertisers would continue to spend money on Twitter and “possible uncertainty surrounding our future objectives and strategy.”
In a statement to workers earlier today, Twitter CEO Parag Agrawal announced that two top executives who oversee the consumer and revenue businesses will be leaving the firm.
This is one of the most significant changes to Twitter since billionaire Elon Musk revealed his intention to buy it.
By the end of 2023, the business aimed for $7.5 billion in annual sales and 315 million daily users, but it dropped both targets in its most recent earnings report.
Twitter will also stop most hiring and analyze all existing job offers to see if any “should be pulled back,” according to Agrawal.
In premarket trading following Musk’s disclosure, Twitter shares plunged 17.7% to $37.10, their lowest level since Musk disclosed his investment in the firm in 2015.
In April, it made a “best and last” bid to take the company private for $54.20 per share.
Meanwhile, Tesla shares were up roughly 5%, indicating that Musk had obtained $6.25 billion in funding for the transaction.
What happened?
According to the filing, Twitter faces various risks until the agreement with Musk is finalized, including whether advertisers would continue to spend money on Twitter and potential ambiguity about its future intentions and strategy.
Musk previously claimed that eliminating spam accounts from the microblogging platform is one of his top priorities.
Musk did not comment on the issue with Twitter’s filing on spam / fake accounts when announcing that the acquisition has been placed on hold temporarily. He didn’t indicate whether he believes the number or whether he will ask for a re-evaluation.
The board of Twitter tried everything it could to stop Elon Musk’s takeover proposal, including using the poison pill method. However, the amount Musk offered, together with the mood of the majority of Twitter shareholders, prompted the board of directors to act.
Elon Musk, the CEO of electric vehicle firm Tesla and SpaceX, had sealed the microblogging platform’s fate in a 44 billion dollar agreement. Twitter Inc. has secured updates to its source code following the acquisition to prevent angry employees from making unauthorized changes to the platform.
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