If you haven’t heard, Elon Musk’s controversial takeover of social media giant Twitter may be about to fall through. On Friday, the billionaire tweeted out that the deal was officially “on hold.”
Well, it appears that one of the main reasons Musk was apparently buying the company may not actually exist, making him question the whole thing.
Then again, as some would believe, this could all just be a play by the electric car mogul to keep himself and Twitter in the news.
According to his Friday tweet, his $44 billion deal was “temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users.” Linked to the post was a supporting article from Reuters saying that quarterly filings estimated the above information to be fact. However, it did note that as an “estimate,” the filing “may not accurately represent the actual number of such accounts.”
Musk had made it clear when he first began the process of buying up Twitter stock and offering to purchase the company outright that one primary reason was to rid the social media platform of its numerous fake accounts, as they are not only a nuisance but a severe hindrance to free speech.
The question is whether or not this estimate would actually sway Musk to back out of the deal or not.
Chances are it wouldn’t. For one, just hours after Musk tweeted about the “hold,” he made another tweet saying that he was “Still committed to acquisition.”
Another thing is that there are still massive changes going on with Twitter, and only because of Musk’s assumed takeover.
Thursday saw the announcement of more recent firings, including that of consumer product leader Kayvon Beykpour and the head of revenue product Bruce Falck. CEO Parag Agrawal also mentioned that the company would be putting a halt to any new hirings as of right now, as well as several cost-cutting moves.
As Aron Solomon, Esquire Digital’s head of strategy and chief legal analyst, says, Musk has “internal eyes and ears” in the social media giant already to “recognize who’s friend and who’s foe.” And this means he’s likely to continue to shake things up, particularly for management, for as long as possible.
Besides, the billionaire has already made it clear he has big plans for the company and where it could be in another couple of years. Namely, that is to be more profitable. As The Wall Street Journal reported, Musk has already made a number of moves hinting that he will be doing whatever possible to cut costs and make operating changes that will better the company’s bottom dollar in the long run.
In fact, he’s even told investors that an initial public offering could just be a few years down the road if all goes as planned.
This and the fact that Musk has now tweeted about his ongoing commitment to close the purchase deal has those like Solomon thinking that the deal isn’t in any actual jeopardy.
For starters, Solomon says deals like this don’t really work in a way where the buyer of a “$43 billion asset tells the seller, ‘Imma pause for a bit.”
Secondly, those quarterly filings were made on May 2, meaning it’s been weeks since Musk was made aware of their information and the estimation of spam account numbers. And yet, he waited a full week and a half to say anything about it or how it might affect the deal. Then, just hours later, he tweeted about it again, suggesting that it may not matter.
As Solomon says, “Musk’s endgame here involves keeping Twitter not just in the daily news cycle but seemingly the hourly.”
And if that means he needs to create a little drama, so be it. Although, it did more than add drama. The WSJ noted that Twitter’s stock fell more than 20 percent following Musk’s “hold” on the deal in the premarket session.
As Solomon says, we don’t exactly know why Musk is doing what he’s doing. But as we’ve already seen with these tweets, it’s going to provide quite the entertainment in the coming weeks.