Elon Musk said early Friday that his plan to buy the social media company was “temporarily on hold” over a report of fake accounts on the platform, later adding that he was “still committed” to the deal.
It was not immediately clear based off Musk’s tweet if any official steps had been taken to halt the acquisition, which was agreed on in late April with a price tag of about $44 billion. Twitter’s value, calculated based on its stock price, has dropped in recent weeks along with a broader decline in tech stocks.
Twitter was worth about $35 billion as of Friday morning. Following Musk’s tweet, the price of Twitter’s stock dropped about 13 percent in pre-market trading.
Musk did not immediately respond to questions via Twitter about any steps taken to halt the deal.
Musk’s tweet included a link to a Reuters article from May 2 on Twitter’s public filings, in which the company said fake or spam accounts only accounted for about 5 percent of its overall user base. Musk has made cracking down on fake accounts a major part of his reasoning for buying the company.
Twitter currently counts about 229 million daily active users.
Though the deal has not gone through yet — major company acquisitions can often takes months or even years to finalize — Twitter has already shown signs of major changes. On Thursday, Twitter pushed out two executives and instituted a hiring freeze.
Musk’s deal to buy Twitter included a $1 billion fee if he were to pull out of the deal.
The Friday announcement from Musk adds another chapter to what has already been a winding and strange acquisition process that started in early April, when it was revealed that he had acquired a major stake in Twitter.
But since then, both the circumstances around Twitter and the broader tech industry have changed. After initially agreeing to join Twitter’s board, Musk reversed course and instead launched a takeover, eventually agreeing to a deal with the company’s board.
Musk has since been taking on investors, but his personal circumstances have also changed. Bloomberg’s Billionaire Index still counts Musk as the world’s richest person, but his net worth has declined by almost 20 percent (about $56 billion) in 2022, due in large part to a steep decline in the stock price of Tesla, where he is CEO. Some of the money Musk has taken out as a loan for the deal is backed by Tesla stock.
One prominent investment group said recently it believed Musk could try to submit a lower bid for Twitter.
Dan Ives and John Katsingris, analysts at Wedbush Securities, a Los Angeles-based investment firm, wrote in a note on Friday that the move by Musk adds support ot the idea that he will try to renegotiate with Twitter or back out of the deal entirely.
“If Musk does decide to still go down the deal path a clear renegotiation is likely on the table which calls into question a number of topics (financing path, leverage of Tesla stock, prior financing partners, employee reaction),” they wrote. “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.”
Twitter has had a history of battling fake, spam and bot accounts, some of which were previously found to spread misinformation and abuse. Once common on the platform, these accounts now mostly violate the company’s policies that ban “commercially-motivated spam,” “inauthentic engagements” meant to make something seem more popular that it is, “coordinated activity” that tries to manipulate conversations, and “coordinated harmful activity that encourages or promotes behavior which violates the Twitter Rules.”
Musk has said he wants to buy Twitter to embrace free speech principles — he recently said he would reinstate former President Donald Trump — but also to crack down on spam and bots.