Elon Musk casts doubt on his takeover of Twitter, wanting details on the number of fake accounts

The Twitter logo on October 26, 2020, on a tablet and on a smartphone in Toulouse (Lionel BONAVENTURE / AFP/Archives)

Elon Musk is sending mixed signals about his plan to take over Twitter: two hours after saying he was suspending the acquisition pending details on the number of fake accounts, the whimsical boss assured that he was “still committed” to carrying out the transaction.

“Twitter acquisition is temporarily on hold pending details that spam and fake accounts account for well under 5% of users,” Musk first wrote on Twitter. platform, where he has almost 93 million subscribers.

He then reiterated his commitment to acquiring the social network, but the market questioned his real intentions.

Statements which had a strong impact on the stock market where the action began by plunging 25% in the wake of the announcement of the suspension before limiting its losses by abandoning around 13% in electronic trading preceding the opening of Wall Street.

Contacted by AFP, Twitter did not react immediately.

After initially opposing it, the board of directors of the tweeting social network accepted a $ 44 billion takeover offer from the whimsical South African-born leader in late April.

Mr. Musk promised to rid Twitter of spam, authenticate users and increase transparency without specifying how he intended to implement this project.

The company indicated at the beginning of May, during the presentation of its quarterly results, to count, on average from January to March, 229 million daily users said to be monetizable, that is to say exposed to advertising.

She had estimated on this occasion that less than 5% of them were spam or fake accounts.

The proportion of fake accounts is “a key indicator” for Twitter, explains Susannah Streeter, market analyst for Hargreaves Lansdown, because “calculating the precise number of people who actually tweet is considered crucial for future revenue streams through advertising or paid subscriptions on the site.”

In addition to his desire to fight spam, Mr. Musk said he wanted to make Twitter a bastion of free speech and said he was ready to reinstate former US President Donald Trump, whose account was permanently suspended. after the attack on the Capitol in January 2021.

“Horror movie”

Since the takeover bid by the boss of Tesla and SpaceX, Twitter’s market value has fallen by billions of dollars, following the same downward movement as most technology stocks and the stock market as a whole.

The title traded on Friday at just over $40, well below the purchase price of $54.20 per share proposed by the billionaire.

Wedbush Securities’ Dan Ives said Elon Musk’s latest tweet “will turn the Twitter takeover circus into a Friday the 13th horror movie.”

“Wall Street will now assess 1) the deal is about to fall through 2) it’s an attempt by Musk to negotiate a lower purchase price or 3) Musk simply wants to get out of the transaction with a severance fee of $1 billion,” the analyst said in a note.

Billionaire Elon Musk arrives at the Met Gala in New York on May 2, 2022
Billionaire Elon Musk arrives at the Met Gala in New York, May 2, 2022 (Angela Weiss / AFP)

The leader had however sought to reassure on the financing of the operation, planning to have recourse to a considerable personal contribution and to request a bank loan as well as a loan on margin in which he would pledge his Tesla shares as collateral guarantee.

Earlier this month, Mr Musk claimed to have raised just over $7 billion from various investors, including Oracle co-founder Larry Ellison and Saudi prince and businessman Al-Walid bin Talal.

“While we never doubted Musk’s ability to complete the transaction from a financial perspective, we felt the biggest risk was that Elon himself might change his mind.” CFRA’s Angelo Zino.

For Dan Ives, the entrepreneur has overestimated the strength of his Tesla shares, whose price has fallen sharply since the announcement of the takeover of Twitter, and could seek to protect the manufacturer of electric vehicles.

“The fact that Musk is creating such uncertainty with a tweet (and not a stock document) is very disturbing for us and for Wall Street” and raises “many questions but no concrete answers as to whether the transaction will take place” , underlines the analyst.

Leave a Comment