Musk’s offer to buy Twitter ‘on hold’
Tesla CEO, Elon Musk, who first became interested in taking over Twitter (TWTR) on 4 April this year, is putting the deal on hold pending further details.
IGTV’s Jeremy Naylor explains this appears to be about the number of fake or spoof accounts which Musk says will make a difference to what he pays for the business.
Twitter purchase on hold
Twitter is on the move, pre-market on the IG platform, on the way down as a result of news breaking that Elon Musk has said he's putting the purchase of the social media company on hold pending further details.
Now, we can see quite clearly, if we refer to what's happening on the IG platform, that the stock is down pre-market as we see things move. We're off the lows, we're currently down something like around about 18%.
You'll remember back on the 4th April that Elon Musk, who founded, and is by far and away the largest shareholder of Tesla, bought 9.2% of Twitter stock, saying at the time he would be a quiet sleeping member of the company rather than go on to the board. Next day, he was voted onto the board and on the 25th of April the price was applied to this deal of $54.20. Now that is this blue dotted line here.
Today we've just heard that Musk is saying that he wants to put this deal on temporary hold after the social network reported that false, or spam, accounts comprise less than 5% of its 226 million monetisable daily active users.
Now this is on The Verge this morning. The Verge is a tech reporting network, and it says that Tesla's chief executive wants to get confirmation that no more than 5% of users are spam accounts, or fake accounts, because obviously he says that could well make a difference to that $54.20 a share that he offered to pay back on the 25th April.
Now you can see here, this has totally unwound all of the gains that we saw back on the 4th April when we heard that he'd bought 9.2% of the company.
Now, Elon Musk has pretty much never, ever spent a dime on advertising Tesla. He's done it all through Twitter, so you can see how important Twitter is to him. This deal could put a brake, certainly, on the price if it's proven that more than 5% of users of Twitter are forming spoof or fake accounts, as The Verge calls them, because the real number could be higher than that, which would have an impact on the price that Musk pays for Twitter.
Watch this space for more details.
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