Elon Musk puts Twitter acquisition temporarily on hold: Here's why
In a surprise turn of events, Elon Musk has put his $44 billion acquisition of Twitter on hold temporarily. The billionaire took to Twitter to let his 92 million followers know that the deal is on hold pending the calculation of fake/spam accounts. He quote tweeted a Reuters report saying that the number of spam/fake accounts on Twitter is less than 5% of users.
- The presence of fake/spam accounts has always been an issue that critics of Twitter have pointed out. However, the company's recent filing suggests that the so-called "problem" is a non-problem.
- Notably, Twitter's track record with numbers is not spotless. It was only recently that the company admitted to overcounting its daily users for three straight years. Perhaps, that's why Musk wants calculations this time.
Musk, in his tweet, referred to a May 2 Reuters report on a filing by Twitter. The filing said that, based on an internal review, the average of fake/spam accounts is less than 5% monetizable daily active users in the first quarter of 2022. The filing also says that it's an estimate and the real number "could be higher than we have estimated."
Citing the report on the filing, Musk has now decided to put the acquisition of Twitter on hold until it can be established that the number of fake/spam accounts is indeed less than 5%. As he has prioritized solving the 'bot problem,' if the numbers from the company are true, it could mean that there has never been a problem in the first place.
The filing in question came only a few days after Twitter's board decided to accept Musk's proposal to buy the company. The filing also shows the state of mind of the company and the people involved at that point. It talks about the uncertainty and risks hanging over the microblogging platform's head until the deal with Musk is closed.
Musk's announcement is of great consequence to Twitter's future. At the time of writing, the company's share price had fallen 15% in pre-market. On the other hand, Tesla's stock was up nearly 7%.