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Elon Musk says Twitter deal is on hold, not sure if he is serious or joking

Elon Musk says Twitter deal is on hold, not sure if he is serious or joking

Elon Musk says the Twitter deal is on hold. It is not clear if Musk is serious about his tweet or if he is just joking. Given the way he has been tweeting for the last 20 days, it could be anything.

Story highlights
  • Elon Musk may not buy Twitter after all.
  • Tesla CEO in his latest tweet states that the $44 billion Twitter deal is on “hold”.
  • It is not clear if Musk is serious about his tweet or if he is just joking.

Elon Musk may not buy Twitter after all. The Tesla CEO in his latest tweet states that the $44 billion Twitter deal is on "hold". Musk offered to buy the popular microblogging site last month for $44 billion. The move, which came as a surprise to most experts and Twitter users, has led to much speculation. While there is no doubt that Musk and Twitter are in agreement that Musk intends to purchase Twitter for $44 billion and close the deal in the coming months, there are speculations that he may back out of the deal.

Update: Elon Musk tweets "still committed to acquisition".

Now, in his latest tweet, Musk said that the "Twitter deal temporarily on hold pending details supporting the calculation that spam/fake accounts do indeed represent less than 5 per cent of users."

It is not clear if Musk is serious about his tweet or if he is just joking. And given the way he has been tweeting for the last 20 days, it could be anything. The reason why the talk of spam bots could be a joke is that such due diligence is usually done before the merger and acquisition deals are announced.

However, in this case, Musk said that a new report — by Reuters, which is relying on Twitter's regulatory filing instead of private internal data — has led him to put a $44 billion deal on hold. Also, the Reuters report is actually a positive report for Twitter because, contrary to what many expect or feel, less than 5 per cent of Twitter users are spam bots, according to the report. Putting a deal on temporary hold over a positive report seems weird, or at least a joke. But then the whole thing of Musk buying Twitter seems like a joke, so we can't be sure. It is possible that Musk has indeed paused the Twitter deal.

Irrespective of what Musk means by putting the deal on "hold", his latest tweet is set to give rise to the chat that the deal between Musk and Twitter is not yet a done thing. There is a lot of talk about Musk buying Twitter. One buzz says that Musk, whose first priority is Tesla, will get out of the Twitter deal before completing it because it has already resulted in Tesla stock getting a hammering on the stock market and diluting the wealth of Musk.

Musk saves Tesla, says no to Twitter?

Then there is the talk that Musk, seeing how Twitter stock remains in doldrums, will want to renegotiate the Twitter purchase and argue for a lower price. On May 9, Hindenberg Research, a US-based financial research firm, said that Musk would try to re-price the Twitter deal. In a tweet, the firm said: "We Are Short Twitter. Musk Holds All The Cards. We See a Significant Risk That The Twitter Deal Gets Repriced Lower." At the same time, in its report, Hindenberg Research added that if Musk doesn't get his way he may even walk away from the deal. While walking away will mean that Musk will have to pay a $1 billion fee to Twitter, Hindenberg Research believes that Musk will not mind it.

In its filing where it highlighted that less than 5 per cent of users were bots, Twitter also noted that until its deal with Musk is completed, it was in uncertain times. Reuters wrote, "Twitter said in the filing it faced several risks until the deal with Musk is closed, such as whether advertisers would continue to spend on Twitter and potential uncertainty regarding (its) future plans and strategy."

Some of this uncertainty seems to be already evident. Just last night, Twitter CEO Parag Agrawal made some sweeping changes in the leadership structure of the company he fired two senior executives — head of product and head of revenue. Parag also said that Twitter was freezing all new hirings and was tightening its belt by cutting down on marketing, offsite, and other expenses.

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