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Twitter Deal Temporarily On Hold, Says Elon Musk

Twitter announced in April that it had agreed to be purchased by Musk for $54.20 a share, or about $44 billion.

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Elon Musk is often spotted replying to Pune techie Pranay Pathole’s tweets. (Photo: PTI)

New Delhi: World’s richest person Elon Musk on Friday said that the Twitter deal is temporarily on hold. Musk tweeted, “Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users”.

The announcement made by the Tesla CEO comes as another twist amid signs of internal turmoil over his planned buyout of Twitter, with the deal reportedly including the demand that the social media company fired two of its top managers.

It wasn’t clear whether the fake account issue could scuttle the Twitter deal. Stock in both Twitter and Tesla swung sharply in opposite directions, with Twitter’s stock tumbling 18 per cent and Tesla, which Musk had proposed using to help fund the Twitter deal, jumped 5 per cent.

Investors have had to weigh legal troubles for Musk, as well as the possibility that acquiring Twitter could be a distraction from running the world’s most valuable automaker.

Twitter said Thursday that the company is pausing most hiring and except for business critical roles. In addition, it said in a statement, “we are pulling back on non-labor costs to ensure we are being responsible and efficient.”

In a memo sent to employees and confirmed by Twitter, CEO Parag Agrawal said the company has not hit growth and revenue milestones after the company began to invest “aggressively” to expand its user base and revenue.

Twitter announced in April that it had agreed to be purchased by Musk for $54.20 a share, or about $44 billion. Days after Tesla Chief Elon Musk took over control of the social media platform, users of the social media site flooded his account with requests for jobs.

Earlier on Friday, shares of Tesla and Twitter tumbled as investors deal with the fallout and potential legal issues surrounding Tesla CEO Elon Musk and his $44 billion bid to buy the social media platform.

Of the two, Musk’s electric vehicle company has fared worse, with its stock down almost 16 per cent so far this week to $728. Twitter shares fell 9.5 per cent for the week, closing Thursday at $45.08. Both stocks have taken a bigger hit than the S&P 500, which is down 4.7 per cent for the week.

Along with malaise in the broader markets, investors have had to weigh legal troubles for Musk, as well as the possibility that his acquisition of Twitter could be a distraction from running the world’s most valuable automaker.

Musk’s USD 44 billion deal to acquire Twitter Inc. is still months away from closing, while some of his fans are soliciting future employment at the social media platform via the mercurial entrepreneur’s Twitter feed.

Tesla Chief earlier in a regulatory filing said he does not have faith in the company’s leadership, leading many to speculate that Twitter’s CEO, Parag Agrawal, is on his way out the door.

(With PTI Inputs)

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