Elon Musk Says Twitter Takeover Deal Is ‘On Hold’

by Suzanne Halliburton

As the stock started dropping, Elon Musk said Friday he is pausing his purchase of Twitter. The reason? He wants more information on the bots.

Elon Musk Pauses Twitter Purchase

  • Musk wants reassurance about the number of Twitter bots after the stock prices dropped almost $10 a share, as of Thursday
  • If Musk backs out, he would owe $1 billion
  • If it goes through, it would be the largest deal to take a company private in two decades

Early Friday morning, Elon Musk quote tweeted a Reuters article about how many spam accounts actually were on Twitter. He shared the article and wrote: “Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users.”

And in a reply to his Tweet two hours later. Musk wrote: “Still committed to acquisition.”

Still, the Twitter price in pre-market trading plummeted after Musk’s announcement. The price did start to recover after Musk made his second tweet.

Several weeks ago, the Twitter board of directors agreed to accept Musk’s offer to buy the social media company and take it private. He offered $54.20 a share for an overall deal worth about $44 billion. But he also made it clear that he wanted to remove spam bots from the platform.

The Reuters story Musk shared Friday was dated May 2. In other words, the news was 11 days old. Reuters reported that Twitter said it had fewer than five percent spam accounts during the first quarter. Twitter also reported that it added 12 million new users in the first quarter, it’s highest rise since the pandemic lockdown in 2020.

Since Musk Said He Was Buying It, Company’s Stock Has Dropped

The Twitter price has decreased since it reached its high for the year in late April. When the market closed Thursday, the stock traded at $45.08. That was below the $54.20 that Musk agreed to pay on April 27. The difference represents more than $9 billion in market value.

If Musk backs out, he would owe a $1 billion break-up penalty. He’s still the richest man in the world, but his wealth is estimated at about $220 billion. Elon Musk could try to say that the Twitter bot numbers were wrong, so he could terminate the deal without penalty. Twitter also could take Musk to court to force him to go through with his pledge to buy the company.

Musk said he wanted to buy Twitter because he was a free speech absolutist and viewed the platform as the world’s town square. He also said he didn’t believe in personal bans of some users, namely former President Donald Trump.