Elon Musk sent mixed messages about his proposed Twitter acquisition, pressuring shares of the microblogging platform amid skepticism on whether the deal will close.
In an early morning tweet Friday, Musk said the $44 billion takeover was “temporarily on hold,” pending questions over the social media company’s estimates of the number of fake accounts or “bots.”
That sent Twitter’s stock plunging 25 percent.
Two hours later, the unpredictable Tesla chief executive added a tweet, saying “Still committed to acquisition.”
Shares recovered a bit, but traded in the red throughout Friday’s session, finishing down nearly 10 percent at $40.72.
While the reliability of user figures is an important benchmark for assessing revenues of Twitter and other social media companies, analysts generally interpreted Musk’s messages as an attempt to pull out of the deal or to try to force a lower price.
“Although we never questioned Musk’s ability to complete such a transaction from a financial perspective, we thought the biggest risk was Elon himself having a change of heart,” CFRA Research’s Angelo Zino said in an analyst’s note. AFP
He said the move gives Musk “leverage” and increases the chance “that he either adjusts his offer price downward or just completely walks away.”
Meanwhile, Chief Executive Parag Agrawal took to the platform to explain moves earlier this week to shake up company leadership and freeze most hiring.
“While I expect the deal to close, we need to be prepared for all scenarios and always do what’s right for Twitter,” Agrawal said. “I’m accountable for leading and operating Twitter, and our job is to build a stronger Twitter every day.”
The chief of SpaceX as well as Tesla, Musk is currently listed by Forbes as the world’s wealthiest person, with a fortune of some $232 billion, much of it in Tesla stock.
Seen by his champions as an iconoclastic genius and by his critics as an erratic megalomaniac, Musk surprised many investors with his pursuit of Twitter.
Musk has described his motivation as stemming from a desire to ensure freedom of speech on the platform and to boost monetization of an Internet site that is influential in media and political circles but has struggled to attain profitable growth.
On Tuesday, Musk said he favored lifting the ban on Donald Trump, who was kicked off the platform in January 2021 shortly after the former US president’s efforts to overturn his election defeat led to the January 6 assault on the US Capitol.