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Just when we thought that the daily rollercoaster over the ownership of Twitter had safely landed and was grounded, news emerges that the deal has not been finalized and is now on hold because there is a significant controversy.
After almost two months of ups and downs, and watching Musk rise to victory with the assistance of the US House of Representatives even, who blew the whistle on the action by the sitting board of Twitter when the board was attempting to deny Musk ownership, Musk appears to have gotten cold feet- or something like that.
According to Musk’s Twitter timeline, he is concerned about technical details that should have been settled by now.
And now he is calling the company out about its practices in a roundabout way.
While Musk threw cold water in the faces of his supporters and those who were hopeful about a positive new direction for the social media giant- he then also seemed to try to keep a grab on the narrative that he was indeed the interested owner of Twitter and that the deal would be finalized- at some point.
The confusing set of events was covered by The Daily Mail on Friday as they reported:
Elon Musk throws his $44billion Twitter deal into chaos by claiming the takeover is ‘temporarily on hold’ but insists he is ‘still committed’ to completing the acquisition.
Tesla CEO announced Friday morning his mammoth takeover bid is ‘on hold’ as he was backpedaling a few hours later; Musk said he was ‘still committed to the deal, leading to confusion online.
Musk claims he wants further information on the number of spam accounts, leading many people to speculate about which high-profile accounts have really been flaunting a fake following all along.
Analysts say the move could be intended to lower the price or pull out of the deal, and on that news, Twitter stock plunged as much as 25% after his first tweet before gaining ground.
Tesla stock jumped 6% as concerns eased about Musk selling more of his shares.
“Elon Musk has insisted that he is ‘still committed’ to his $44 billion acquisition of Twitter after throwing the deal into chaos by tweeting that it was ‘temporarily on hold’ citing an article by Reuters.
Still committed to acquisition
— Elon Musk (@elonmusk) May 13, 2022
In the Reuters article Musk linked to was further reporting on the details that Musk is concerned about:
In a filing on Monday, Twitter Inc(TWTR.N)estimated that false or spam accounts represented fewer than 5% of its monetizable daily active users during the first quarter.
Update – Musk shelves $44-billion Twitter deal ‘temporarily,’ shares slump on the news that the social media company had 229 million users who were served advertising in the first quarter.
The disclosure came days after Tesla Inc (TSLA.O) Chief Executive Elon Musk, who has inked a deal to buy Twitter for $44 billion, tweeted that one of his priorities would be to remove “spam bots” from the platform.
Twitter said in the filing it faced several risks until the deal with Musk was closed, such as whether advertisers would continue to spend on Twitter and “potential uncertainty regarding our future plans and strategy.”
Musk’s surprise tweets early Friday sent Twitter stock plunging in the pre-market, as analysts speculated that Musk is trying to negotiate a lower price for the deal or pull out completely.
According to Finances online, the number of users is confusing: “Twitter has some 330 million monthly active users (MAU) based on its last reported data that leveraged this metric in the 1st quarter of 2019. As of 2020, Twitter’s monetizable daily active users (mDAU) stands at 166 million, which represents a 24% growth from 2019. Meanwhile, in the US alone, Twitter has 69.3 million active users as of January 2021,” Financiases Online reported.
“Twitter is particularly popular in the US and as of January 2021, the microblogging site had 69.3 million active users (DataReportal, 2021). Japan and India were ranked second and third with 50.9 and 17.5 million users, respectively. Twitter’s user base represents only a fraction of the total social media users in 2020,” their research showed.
Though Twitter’s board agreed to Musk’s purchase last month, it still has not been approved by shareholders and was not expected to close for at least several months. The legal and practical implications of Musk’s tweets were unclear.
Shares of the social media company fell as much as 25 percent in premarket trading this morning, continuing a massive downward trend since his takeover bid was accepted by Twitter’s board on April 25.
It is not clear what the legal effect of his tweet was, and some analysts were baffled that he announced the move on Twitter rather than a regulatory filing.
Wedbush analyst Dan Ives called Musk’s tweet ‘bizarre’ and said that it ‘now sends this whole deal into a circus show with many questions and no concrete answers.’
‘Many will view this as Musk using this Twitter filing/spam accounts as a way to get out of this deal in a vastly changing market,’ Ives wrote in a note.
‘If Musk does decide to still go down the deal path a clear renegotiation is likely on the table,’ he added.