One of the biggest tech stories of the year so far has been Twitter “reaching a definitive agreement to be acquired by an entity wholly owned by Elon Musk” in a deal that could ultimately be worth about $44 billion.This action has been more or less uninterrupted since then, and recent developments are remove a few executivesand Musk’s announcement that he would allow former US President Donald Trump to return to the platform.
Now Musk has suddenly announced that the deal is “on hold” (Thanks, Financial Times), tweeted a recent Reuters article about the percentage of spam/bot accounts on the platform, and said he needed to back up Twitter’s claim that they represent less than 5% of the platform’s users for details.
Twitter deal on hold pending details to support counting spam/fake accounts do represent less than 5% of users https://t.co/Y2t0QMuuynMay 13, 2022
Unsurprisingly, Twitter shares tumbled in premarket trading and are now down about 20% from yesterday’s close. Of course, this could all change in an instant, but there are certainly many shareholders who are currently experiencing what Sir Alex Ferguson once described as “squeaky wanderlust”.
Musk has blasted spam accounts in the past and said reducing such activity would be one of the main goals if he took over the platform. The question is whether Twitter really underestimated the magnitude of the problem. Any Twitter user will see bots and spam accounts there, but Twitter has always said it represents only a small subset of users: if reality were any different, that would of course affect any business strategy Musk might have.
As of this writing, there are no new filings with the SEC, just Musk’s public statements. Some might speculate he’s starting to look for a way out, and the deal is clearly not as clear-cut as it was a few weeks ago. If Musk pulls out of the deal, he’ll have to pay Twitter a $1 billion “cancellation fee” — which could make the “acquisition” the most expensive spam post in history.