Elon Musk Announces Hold On Twitter Deal, Citing Bot Account Issues
Elon Musk has hit a bump in his $44 billion acquisition of Twitter, writing online that he is “still committed to acquisition” but has put the deal “temporarily on hold,” because of the issue of bot accounts. He has previously said that removing “spam bots” from the site was one of his chief goals if he were to become Twitter’s new owner. He also shared an article that said Twitter’s spam accounts only make up 5% of users but seemed to express skepticism about that figure.
Still committed to acquisition
— Elon Musk (@elonmusk) May 13, 2022
Some think that Musk has gotten cold feet from the deal and is using the bot issue as a cover to back away from it while he still can. The justification for this theory is that Musk likely already knew about Twitter’s issue with false accounts, as the company has expressed to the SEC in previous public filings that they may have underestimated their calculations of fake accounts on the platform.
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He may be pausing the deal because of the financial instability the looming Twitter buyout is causing for his electric car company Tesla. Musk has already sold more than $8 billion worth of his Tesla stock shares to finance the acquisition and is putting up even more borrowed stock from the company along with almost $21 billion in Tesla equity.
Tesla stocks have been suffering as a result of Musk toying with the deal, causing Musk to have to redraft the amount he’s putting up from the company several times. From a value of $1,150 in early April at the time of announcements, Tesla’s share values are down to $785.25 as of Friday.
According to their deal, Musk is not allowed to back out of the deal due to the shifting market and will have to shell out a hefty $1 billion as a cancellation fee. This tweet might be Musk’s attempt to obfuscate his motivation for the deal and maybe skip the fee. His decision to use the platform itself to announce the hold, however, could backfire on him because Musk is actually barred from tweeting things that could affect Tesla’s stock prices before consulting with a company attorney first.
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