World’s richest man, Elon Musk on Friday announced a temporary suspension of his $44 billion deal to take over Twitter Inc.
The reason he gave is that the social media giant has not released details in support of a claim that spam and fake accounts on Twitter indeed represent less than 5% of its total users.
The market has reacted to this as the shares of the social media company fell 17.7% to $37.10 in premarket trading.
This is their lowest level since Musk disclosed his stake in the company in early April and subsequently made a best and final offer to take it private for $54.20 per share.
The implied probability of the deal closing at the agreed price fell below 50% for the first time on Tuesday, when Twitter shares dropped below $46.75.
Twitter had earlier this month estimated that false or spam accounts represented fewer than 5% or 11.45 million of its monetizable daily active users during the first quarter, when it recorded 229 million users who were served advertising.
“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users,” Musk tweeted on Friday.
Musk, the world’s richest man and a self-proclaimed free speech absolutist, had said that one of his priorities would be to remove “spam bots” from the platform.
The social media company had said it faced several risks until the deal with Musk is closed, including whether advertisers would continue to spend on Twitter amid “potential uncertainty regarding future plans and strategy.”
Musk has been critical of Twitter’s moderation policy. He has said he wants Twitter’s algorithm to prioritize tweets to be public and was against too much power on the service to corporations that advertise.
