Elon Musk says Twitter deal is temporarily on hold

The Tesla chief awaits confirmation that spam or fake accounts represent less than 5 per cent of the platform’s users

Elon Musk has secured more than $7.1 billion in new equity funding from a group of investors to help finance his $44bn acquisition of Twitter. Reuters
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Elon Musk said his acquisition of Twitter for about $44 billion is temporarily on hold pending details on the amount of fake accounts on the social media platform.

“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users,” the billionaire businessman wrote on Twitter on Friday.

However, Mr Musk later said on Twitter on Friday that he is still "committed to acquisition" of the microblogging website.

The share price of Twitter fell more than 18 per cent in pre-market trading to $36.80 a share in the US.

In a filing on Monday, Twitter said false or spam accounts represented fewer than 5 per cent of its monetisable daily active users during the first quarter. The San Francisco-based social media company said it had 229 million users who were served advertising in the first quarter.

The disclosure came after Mr Musk, who is the founder and chief executive of electric vehicle maker Tesla and rocket company SpaceX, tweeted that one of his priorities would be to remove spam bots from the platform.

Last month, Twitter entered a definitive agreement to be acquired by an entity wholly owned by Mr Musk, for $54.20 a share in cash.

Upon completion of the transaction, which was expected by the end of this year, Twitter would become a privately-held company.

If Mr Musk decides to abandon the agreement he would have to pay the social media company a $1bn break-up fee.

Mr Musk sold about $8.5bn worth of his shares in Tesla to fund part of his buyout of Twitter. He has secured more than $7.1bn in new equity funding from a group of investors to help finance his $44bn acquisition of Twitter.

Eighteen investors have made commitments ranging from $850,000 to $1bn to help Mr Musk finance this deal, according to a regulatory filing at the US Securities and Exchange Commission.

He said he has received equity commitment letters from various investors, including Sequoia Capital, Binance, Litani Ventures, Qatar Holdings, Vy Capital, Key Wealth advisers, Honeycomb Asset Management and Brookfield. This also includes a $1bn contribution from Larry Ellison, founder of Texas-based technology company Oracle.

Last month, Twitter reported a surge in first-quarter net income to $513.3 million, from $68m in the same period in 2021, days after it agreed to be sold to Mr Musk.

The billionaire may take Twitter public again after he finalises the acquisition to buy it, The Wall Street Journal reported last week.

Mr Musk may list Twitter as soon as three years after buying it, the newspaper reported, citing people familiar with the matter.

Updated: May 13, 2022, 12:06 PM
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