Elon Musk said his $44 billion bid to buy Twitter was “temporarily on hold” until he could get more details to confirm that spam and fake accounts represent less than 5 percent of the social network’s total number of users.
Mr. Musk made the announcement in a pre-dawn tweet on Friday, the latest chapter in an unfolding corporate drama that has raised questions about free speech online and the ramifications of putting the world’s richest person in charge of one of the most influential social media platforms.
Mr Musk, Tesla’s chief executive, has said ridding the platform of fake accounts, bots and spam would be one of his top priorities after the acquisition. In his tweet, Mr. Musk referred to a May 2 registration request by Twitter, which included an estimate of the number of spam and fake accounts.
The comments from Mr. Musk, who was known for his free-spirited and sometimes impulsive business style, raised questions about the future of the deal.
About two hours after his first post on Friday — and after shares on Twitter fell about 20 percent in premarket trading — Mr. Musk posted again that he “still committed to acquisition.”
Twitter has few restrictions on signing up for an account, and the company has long struggled with spam and bots. But it was difficult to give an exact figure on the magnitude of the problem. In a May 2 regulatory filing, Twitter said it had estimated that less than 5 percent of its users were fake or spam, a figure it had previously disclosed. Twitter warned that it had applied “considerable judgment” when making the calculation and that its “estimation of fake or spam accounts may not accurately reflect the true number,” language similar to that used in the company’s previous filings.
Mr. Musk’s comments were seen as a tactic to lower the price of the acquisition or as a pretext for eventually withdrawing altogether.
“Many will see this as Musk using these Twitter/spam accounts as a way out of this deal in a rapidly changing market,” Daniel Ives, an analyst at Wedbush, said in a note to investors.
Twitter did not respond to a request for comment.
Mr. Musk’s surprising offer on Twitter has sparked a lot of discussion about the role of a social media platform to monitor what is being said by its users. Twitter has spent years trying to fight hate speech, harassment and other online abuse, but Mr. Musk, who has used the platform in the past to attack and belittle critics, has promised to follow the company’s content moderation policy. relax. On Tuesday, he said he would lift a ban on former President Donald J. Trump.
How Elon Musk Bought Twitter
A blockbuster deal. Elon Musk, the world’s richest man, put an end to what seemed an unlikely attempt by the famed mercurial billionaire to buy Twitter for about $44 billion. Here’s how the deal unfolded:
Withdrawing from the deal can get messy. The purchase agreement includes a $1 billion fee that Mr Musk would have to pay if he terminated the deal, although it was unclear how such a clause would apply if Mr Musk could prove Twitter’s user numbers were incorrect. If Mr Musk’s debt financing is intact, Twitter could also sue the billionaire to force him to pay the deal.
Mr. Musk has pledged to use a significant portion of his personal fortune to fund the Twitter deal, a plan that was impacted by a recent drop in stock prices, including Tesla’s. Tesla stock has fallen nearly 30 percent in the past month. Mr. Musk is selling both Tesla stock and them as collateral for personal loans to raise money.
If a deal were to be struck, business challenges on Twitter could force Mr. Musk to get more out of his shares in the electric carmaker to plug potential financial gaps. And any problem at Tesla that caused its stock to fall far enough could lead to clauses in Mr. Musk’s personal loans that would require him to add more collateral, limiting his ability to invest in Twitter.
Tesla stock rose Friday after Mr. Musk’s comments.
Mr. Musk’s offer has created uncertainty within Twitter, a company that is already struggling to add users and generate more revenue. On Thursday, Twitter CEO Parag Agrawal fired two top executives, cut new hires and pledged to cut spending.