Elon Musk says Twitter deal on a temporary hold

Citing a finding on pending details supporting the calculation of spam or fake accounts on the platform, Elon Musk has announced a temporary hold on the acquisition of Twitter, and its transformation to a privately-owned company.

Elon Musk shared a Reuters news report that states Twitter estimated fake or spam accounts represent fewer than 5% of monetizable daily active users in the first quarter. The Twitter Q1 2022 Report suggested average monetizable daily active users accounted for 229.0 Mn users for Q1, up 15.9% compared to Q1 of the prior year.

On April 25, 2022, Twitter announced that the company entered into a definitive agreement to be acquired by an entity wholly owned by Elon Musk, for 54.20 USD per share in cash. Upon completion of the transaction, Twitter will become a privately held company. The transaction was expected to close in 2022 and has been approved by the board of directors of Twitter.

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The recent finding presented potential uncertainty towards the plans and strategy for the company, and also represents a potential a peril for the advertising revenue, as it may lead to advertisers slacking budgets if they believe ads being served spam or fake accounts would hinder their campaign performance or is substantial enough to raise concerns.

Along with mentioning the “potential of Twitter” that Elon plans to “unlock”, he had also mentioned that eliminating spam or fake accounts is a key area he’s looking at to improve with the takeover.

Several financial and social media experts have had their doubts about the deal going through, and the definitive agreement cited that apart from pending formalities the deal was permanently locked, until the announcement by Elon himself.

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