Last month, Twitter announced that it has struck a deal with Elon Musk to acquire the micro-blogging platform for $44 billion or $54.20 per share in cash.
Now, Musk has confirmed that the deal has been put on hold. According to Musk's latest tweet, the Twitter acquisition has been put on hold as he verifies Twitter's claim that less than 5% of the users are bot/fake accounts. Last week, Twitter disclosed that it estimates fake or spam account count to be less than 5% of its monetizable daily active users during the first quarter.
According to the terms of the agreement, Musk will have to pay a billion dollar penalty if he backs out of the Twitter deal. In a subsequent tweet, Musk said he is committed to acquiring Twitter:
Still committed to acquisition— Elon Musk (@elonmusk) May 13, 2022
Furthermore, Musk said he will be taking a random sample of 100 follows of Twitter's official account to verify the company's claim that less than 5% of the users are fake or spam accounts:
To find out, my team will do a random sample of 100 followers of @twitter.— Elon Musk (@elonmusk) May 14, 2022
I invite others to repeat the same process and see what they discover …
Meanwhile, Wall Street did not like the news of acquisition being put on hold as share prices of Twitter fell more than 10% during the pre-trade window on Friday.
Twitter's share closed at $40.60 on Friday, down from $45.07 on Thursday and roughly 23% down from Musk's buying price of $54.20.