A cloud of uncertainty seems to be hovering over Elon Musk’s Twitter acquisition. The Tesla CEO in a tweet said the deal has been temporarily put on ice for reasons bothering on “calculation that spam/fake accounts do indeed represent less than 5% of users.”
In a follow up tweet, however, Musk said he is still “committed to acquisition.”
The source of concern for Musk is a section of Twitter filing about the number of false or spam accounts:
We have performed an internal review of a sample of accounts and estimate that the average of false or spam accounts during the first quarter of 2022 represented fewer than 5% of our mDAU during the quarter. The false or spam accounts for a period represents the average of false or spam accounts in the samples during each monthly analysis period during the quarter. In making this determination, we applied significant judgment, so our estimation of false or spam accounts may not accurately represent the actual number of such accounts, and the actual number of false or spam accounts could be higher than we have estimated.
The market as expected responded to the uncertainty surrounding the acquisition. On Friday, Twitter shares came crashing; dropping more than 10 percent at market open. The shares traded as much as 14 points below the nominal acquisition price of $54.20 a share.
Prior to the announcement of the acquisition, the Tesla and SpaceX CEO bought a 9.2 percent stake in Twitter; paying $2.89 billion as at close of share price as per filing made to the United States Securities and Exchange Commission.
With more than 80 million followers on Twitter, Musk is one of the most followed users on the platform. This decision had a positive impact on Twitter shares, soaring more than a quarter in pre-market trading according to the Guardian.
Musk’s 9.2 percent stake makes him the biggest shareholder in the company; four times more than the 2.25 percent held by co-founder Jack Dorsey.
Shortly after that, Twitter announced that its majority shareholder, Elon Musk will not be joining the board after all. The announcement was made by Twitter CEO, Parag Agrawal in a message to the company one week after it said Musk was joining the board.
Rumors and various reports of Musk’s offer to buy Twitter began to surface—with Twitter initially saying no to the Tesla CEO.