Elon Musk announces suspension of Twitter takeover pending details on proportion of fake accounts

The CEO of Tesla and the richest man in the world, Elon Musk, announced on Friday, May 13, to suspend the takeover of Twitter pending details on the proportion of fake accounts on the social network. The action of the group, listed on the New York Stock Exchange, immediately plunged about 20% in electronic trading before the opening of Wall Street.

Friday noon, the title was trading at just over $36, well below the purchase price of $54.20 per share proposed by the billionaire.

“Twitter acquisition temporarily on hold pending details that spam and fake accounts represent well under 5% of users”, wrote Mr. Musk on the platform. Contacted by Agence France-Presse (AFP), Twitter did not react immediately.

Mr. Musk repeated that his plan to take over the social network includes a major operation to combat fake accounts and spam. The figure of 5% of fake accounts is the one officially communicated by Twitter in May, but there are several criteria to identify them and several ways to define the legitimacy of an account.

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The social network announced on April 25 that it had accepted the billionaire’s takeover offer. The latter had made a takeover proposal on April 14, saying he was ready to pay 54.2 dollars (52.10 euros) per share. It represented a premium, that is to say a bonus, of 54% compared to the opening price of the title on January 28, the date on which Mr. Musk began to invest in Twitter. In total, Mr. Musk has put 43 billion euros on the table and claims to have been able to build the corresponding financing plan.

Ready to reinstate Donald Trump

The next day, Twitter announced that it was putting in place a clause, dubbed “poison pill”, supposed to prevent Elon Musk from easily redeeming his shares. Several shareholders, including the fund headed by Saudi Prince Al-Walid Bin Talal Al Saud, one of Twitter’s main shareholders, had deemed Mr. Musk’s offer too weak.

For several days, the possibility of a takeover had seemed to move away – Mr. Musk, accustomed to sudden changes in strategy and provocations, had also given up, in mid-April, to sit on the board of directors of the company. company, of which he had become the main shareholder. At the same time, he had multiplied criticism against the company… on Twitter, where he is one of the most followed personalities, with more than 90 million subscribers.

Also listen What future for Twitter, bought by Elon Musk?

Its takeover plan also had significant consequences for its flagship company, Tesla, whose stock plunged after the announcement of the future takeover of Twitter. Investors find it very counterproductive for Mr. Musk to divide his time between several companies. This drop in price has also weakened the Twitter takeover project, part of the loans requested by Mr. Musk being pledged on Tesla shares – the drop in their value has mechanically increased the cost of these loans.

Mr. Musk had promised to rid Twitter of spam, authenticate users and increase transparency, without specifying how he intended to implement this project. Mr. Musk also said he wanted to make the platform a bastion of free speech and said he was ready to reinstate former US President Donald Trump, whose account had been permanently suspended after the attack. Capitol in January 2021.

Read also: Elon Musk says he’s ready to reverse Donald Trump’s Twitter ban

The World with AFP

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