Elon Musk continues to be a hot mess whose billions of dollars give him the power to inflict his hot messiness on the world. On Friday, just days after saying he would reverse Donald Trump’s Twitter ban, he tweeted that his deal to buy the company is “temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users.” Two hours later, he followed up to say that he was “still committed” to buying the social media platform.
Sure he is.
Musk’s initial tweet cause an 18% drop in Twitter stock, which recovered slightly after his second tweet. That’s on top of a drop in Twitter share prices that left the company worth $9 billion less than Musk had agreed to pay for it. (If nothing else, this whole saga is showing how imaginary and whim-driven the “value” of many companies is.)
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One particularly striking thing about Musk’s “on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users” thing is that there have always been questions about how many spam and fake accounts there are on Twitter, but Musk suddenly put the deal on hold (via tweet) after the company came out with an estimate that those accounts are less prevalent than some have suspected. This raises questions about whether the estimate provided an excuse for something Musk was looking to say anyway. Or maybe it simply caught his attention for a minute, he fired off an ill-considered tweet, and then backtracked when he realized that could be a problem. Either way, it’s a poor advertisement for how he’ll run one of the world’s major social media platforms, although maybe a better advertisement than the rampant racism at Tesla.
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Multiple analysts said Musk’s tweets did suggest he’s looking to get out of the deal to buy Twitter or trying to renegotiate.
”The $44 billion price tag is huge, and it may be a strategy to row back on the amount he is prepared to pay to acquire the platform,” said a senior investment and markets analyst at Hargreaves Lansdown in a statement.
”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,” a Wedbush Securities analyst wrote to investors.
Twitter’s isn’t the only relevant stock to have dropped since Musk’s purchase was announced. Tesla stock has also dropped by nearly 30% over the past month—but rose some on Friday after his tweets about Twitter. Since Musk’s personal wealth is largely in the form of Tesla shares, the drop in the value of those could be a barrier to closing the deal.
If Musk walks away from Twitter, he will owe the company a $1 billion breakup fee, and vice versa. The more his erratic behavior is on display, the cheaper that seems.
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