Elon Musk on Friday said that his $44 billion Twitter deal is on hold because he wants to confirm spam or fake accounts represent less than 5 percent of users He also tweeted a Reuters link reporting the same.
It seems Musk has a concern about the spam or fake accounts figures shared by Twitter. So, he wants to confirm the numbers before proceeding with the deal. After his tweet, Twitter’s share fell around 25% in pre-market trading.
During the first quarter, Twitter estimated that spam or fake accounts represent less than 5% of Twitter’s monetizable daily active users. The company also confirmed that it had 229 million users.
Twitter has been struggling to stop spam or fake accounts for a long time. It allows Bot accounts under its policy and even adds a label for “good” bots. But spam bots are not allowed on the platform.
It is not clear if Musk is serious or if the tweet was just a joke. In merger or acquisition deals, due diligence is done before the announcement of the deal. As per the agreement, if Musk walks away from the deal, he will have to pay a $1 Billion breakup deal to Twitter.
Reports also suggest that Musk may negotiate for a lower deal price.
Elon Musk has already revealed his plans on how he wants to increase revenue and reduce the operational costs of Twitter. He already tweeted about eliminating the salaries of the company’s board of directors to save $3 million.
Musk’s deal will still take months for regulatory approval. For completing this deal, Musk has raised $13 billion in loans secured against Twitter and a $12.5 billion margin loan tied to his own Tesla stocks.
