Elon Musk put his $44-billion deal for Twitter Inc (TWTR.N) “temporarily on hold” on Friday while he awaits data on the proportion of its fake accounts, sending the shares in the social media platform plunging.
Twitter shares fell 17.7% to $37.10 in premarket trading, their lowest level since Musk disclosed his stake in the company in early April and subsequently made a “best and final” offer to take it private for $54.20 per share.
Meanwhile, Tesla shares, against which Musk has secured $6.25 billion in funding for the acquisition, were up about 5%.
“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users,” Musk told his more than 92 million Twitter followers on Friday.
In his latest tweet, Musk referred to a Reuters story from May 2 that said Twitter had estimated that false or spam accounts represented fewer than 5% of its monetizable daily active users during the first quarter, when it recorded 229 million users who were served advertising.
“This 5% metric has been out for some time. He clearly would have already seen it… So it may well be more part of the strategy to lower the price,” Susannah Streeter, an analyst at Hargreaves Lansdown.
“It’s going to be highly frustrating for many in the company given that a number of senior executives have already been laid off,” she said.
The implied probability of the deal closing at the agreed price fell below 50% for the first time on Tuesday, when Twitter shares dropped below $46.75.