NEW YORK, United States —
Elon Musk sent
mixed messages Friday about his proposed Twitter acquisition, pressuring shares
of the microblogging platform amid skepticism on whether the deal will close.
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In an early-morning tweet, Musk said the $44
billion takeover was "temporarily on hold," pending questions over
the social media company's estimates of the number of fake accounts or
"bots."
That sent
Twitter's stock plunging 25
percent.
Two hours later, the unpredictable Tesla
chief executive added a tweet, saying "Still committed to acquisition."
Shares recovered a bit, but traded in the
red throughout Friday's session, finishing down nearly 10 percent at $40.72.
While the reliability of user figures is an
important benchmark for assessing the revenues of Twitter and other social
media companies, analysts generally interpreted Musk's messages as an attempt
to pull out of the deal or to try to force a lower price.
"Although we never questioned Musk's
ability to complete such a transaction from a financial perspective, we thought
the biggest risk was Elon himself having a change of heart," CFRA
Research's
Angelo Zino said in an analyst's note.
He said the move gives Musk
"leverage" and increases the chance "that he either adjusts his
offer price downward or just completely walks away."
Meanwhile, Chief Executive
Parag Agrawal
took to the platform to explain moves earlier this week to shake up company
leadership and freeze most hiring.
"While I expect the deal to close, we
need to be prepared for all scenarios and always do what’s right for Twitter,"
Agrawal said. "Im accountable for leading and operating Twitter, and our
job is to build a stronger Twitter every day."
Skepticism in market
The chief of
SpaceX as well as Tesla, Musk
is currently listed by Forbes as the world's wealthiest person, with a fortune
of some $232 billion, much of it in Tesla stock.
Seen by his champions as an iconoclastic
genius and by his critics as an erratic megalomaniac, Musk surprised many
investors with his pursuit of Twitter.
Musk has described his motivation as stemming
from a desire to ensure freedom of speech on the platform and to boost
monetization of an Internet site that is influential in media and political
circles but has struggled to attain profitable growth.
On Tuesday, Musk said he favored lifting the
ban on Donald Trump, who was kicked off the platform in January 2021 shortly
after the former US president's efforts to overturn his election defeat led to
the January 6 assault on the
US Capitol.
Analysts also have said the site can boost
Musk's other ventures, including Tesla, which so far has grown without
following the auto-industry custom of spending heavily on marketing.
But markets have shown skepticism since the
April 28 announcement that the Twitter board agreed to sell at $54.20 a share.
The share price has lagged that level,
suggesting investors viewed deal closure as not assured, and has fallen further
as the broader tech market retreated this week.
'Horror show'
In his first tweet about the deal Friday,
Musk linked to an article from May 2 referencing Twitter's latest filing to US
regulators.
The document said an internal review showed
Twitter had 229 million "monetizable daily active users" in the first
quarter of this year, and just five percent were regarded as false or spam
accounts.
Analyst Dan Ives from Wedbush said the
"circus show" was likely to translate into a "Friday 13th horror
show."
"The nature of Musk creating so much
uncertainty in a tweet (and not a filing) is very troubling," he said.
Musk has gotten into hot water with regulators
over his tweets in the past, but the Twitter purchase agreement includes a
clause specifying that he is free to tweet about the deal provided his posts
"do not disparage the company or any of its representatives."
Market analyst Susannah Streeter of
Hargreaves Landsdown said the takeover bid "risks hitting the skids."
There will be questions "over whether
fake accounts are the real reason behind this delaying tactic," Streeter
said, adding that "it may be a strategy to row back on the amount he is prepared
to pay to acquire the platform."
Musk's potential stewardship of the social
media site has hit several bumps since the takeover attempt was made public,
and sparked worry from activists, over lifting of the Trump ban as well as the
possibility the new owner would open the gates to abusive and misinformative
posts.
US media have reported that the transaction
is being investigated by regulators, including the Securities and Exchange
Commission with which Musk has frequently clashed.
The SEC is probing Musk's tardy disclosure
of his stake in Twitter, according to The Wall Street Journal.
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