Elon Musk obviously loves the rodeo. On Friday, the boss of Tesla caused the share price of Twitter to fall sharply by announcing that he was pausing in his plan to take over the social network. “The acquisition of Twitter is temporarily on hold pending details that spam and fake accounts represent well under 5% of the user base,” he announced on the platform, where he has almost 93 million subscribers.
Two hours later, however, the billionaire assured that he was “still committed” to acquiring Twitter. The price of the title, which had plunged 25% in electronic trading before the opening of Wall Street, reduced its losses a little (to -13%) at the start of the day in New York.
Still committed to acquisition
— Elon Musk (@elonmusk) May 13, 2022
“Many will think that Musk is using this issue of Twitter spam accounts as a way to get out of this deal in a changing market,” Wedbush analyst Daniel Ives said in a note after the initial announcement. The figure of less than 5% of fake accounts was published by Twitter in early May, during quarterly results showing 229 million “monetizable” daily users (exposed to advertising).
“If Musk decides to pursue the deal, it is likely that a clear renegotiation will be on the table, which calls into question a number of topics (method of financing, leverage of Tesla shares, previous financial partners, reaction of employees),” continues Daniel Ives.
Some have already doubted for several weeks that Elon Musk will go through with an operation that weighs in particular on the value of Tesla. A sign of this skepticism, the price of Twitter has remained in recent days well below the 54.20 dollars proposed by Elon Musk at the end of March.
The operation further destabilizes Twitter, whose board of directors last month accepted Elon Musk’s $44 billion offer. Thursday, the management of the social network had announced the freezing of non-essential hiring pending the closing of the operation, and the immediate departure of two leaders. The agreement signed at the end of April between Twitter and Elon Musk, however, provides for a forfeiture clause of 1 billion dollars if the billionaire renounces the takeover of the social network.
The method of the announcement will also be criticized, while Elon Musk’s slippages in financial communication have already earned him a fine of 20 million dollars. The financial market policeman is also investigating the conditions under which the boss of Tesla rose to the capital of Twitter. He late declared crossing the 5% holding threshold and had initially reported a “passive” transaction.
Apostle of greater freedom of expression on a social network that is already largely unbridled, Elon Musk promised to rid Twitter of spam, to authenticate users and to strengthen transparency, without however specifying how he intended to implement this. project. He also indicated this week that, owner of Twitter, he would end the permanent exclusion of Donald Trump, banned from the platform after the invasion of the Capitol on January 6, 2021.