And just about 2 hours ago, Musk tweeted that the acquisition of Twitter (TWTR.US) was on hold as it waited for details on the calculation that fake or spam accounts do account for less than 5% of users. .
Twitter said in its latest quarterly results that “fake or spam accounts accounted for less than 5% of monetizable daily active users in the first quarter of 2022.” Now, however, Twitter says it has made “significant judgments” on the latest estimates, and the actual numbers may be higher.
Fighting fake or spam accounts has been a top priority for Musk to overhaul Twitter. In a statement announcing the acquisition of Twitter last month, Musk revealed that he wants to defeat spam programs, authenticate everyone and make its algorithms open source; he also said he wants to make the platform a bastion of free speech , and remove the barriers that come with content moderation.
Twitter announced on April 25 that it agreed to Musk’s $54.2 per share offer, totaling $44 billion. In recent days, however, the market has grown increasingly skeptical that Musk will succeed in acquiring Twitter, and that Musk may consider lowering his bid.
As of the close of U.S. stocks on Thursday, Twitter closed down 2.19% at $45.08; the gap between the stock’s current share price and Musk’s proposed $54.2 purchase price has further widened to $9.11 since Musk announced the acquisition of Twitter. Largest spread ever.
Just on Thursday, Twitter CEO Parag Agrawal told employees in an internal memo that Bruce Falck, general manager of revenue, and Kayvon Beykpour, general manager of consumer, would be leaving the company, in addition to a hiring freeze and a reduction in many employees. item expenditure. The changes reflect Twitter’s current precarious state as it waits for a new owner.
Short-seller Hindenburg Research warned on Monday that the deal risked being repriced if Musk walked away from the Twitter acquisition. Hindenburg also revealed that it is shorting Twitter, saying: “Musk has all the initiative. We believe that if Musk withdraws his bid tomorrow, Twitter’s market value will fall by 50% from current levels. So we see this as a significant risk.”
In addition, Hindenburg believes that if the deal goes through in its current form, Twitter would be leveraged as much as 8.6 times its earnings before interest, taxes, depreciation and amortization (EBITDA) when the acquisition closes, which would boost Twitter’s Financial health recovery is more challenging.
Peter Schiff, a well-known gold bull and chief economist at Euro Pacific Capital, commented on Musk’s tweet: “Looks like I’ve always been right. You never really intended to buy Twitter. You’ve been bluffing. After posting this How much Twitter stock did you sell before the announcement?”
Musk is in talks to raise enough equity and preferred stock financing for his plan to buy Twitter so he doesn’t have to use Tesla stock as collateral for a margin loan, a person familiar with the matter said. Wedbush analyst Dan Ives believes that Musk’s acquisition of Twitter has a more than 90% chance of realization, but he also expects the deal to have more twists and turns in the future. Or as Dan Ives put it: “It’s a soap opera, and it’s going to have many different chapters.”