Elon Musk’s Twitter Acquisition Deal Is Put On Hold

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Billionaire Elon Musk says the progression of his controversial deal to buy Twitter is on hold, although he added that he remains intent on seeing it through. He made these revelations, fittingly enough, on Twitter, writing on the platform: “Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users… Still committed to acquisition.”

“It was not immediately clear how the Tesla CEO would pause the deal or how serious the threat was. Musk is prone to brash statements on Twitter, something that has drawn scrutiny by the Securities and Exchange Commission,” The Washington Post notes. In his first post on the matter, Musk linked to an article explaining how Twitter — where he currently, just to be clear, exercises no control — said false or spam accounts constituted fewer than five percent of its monetizable daily active users across the first quarter. A full 229 million Twitter users were served advertising in the first quarter. Along with any other ramifications, it would appear as though the level of spam accounts on the site remaining purportedly low would help provide incentives for advertisers to continue their interest in the platform. As Reuters notes, Twitter said in the same filing where it revealed those purported spam accounts numbers that details of future advertiser spending on Twitter remained an open question as Musk’s sought after takeover loomed.

Musk has reportedly been seeking additional sources of financing for the Twitter purchase he’s hoping to accomplish. One of the issues driving this reported push is apparently the recent lowering of Tesla’s stock price — Musk, the Post notes, had incorporated a substantial portion of his stake in Tesla into the financing for the planned takeover. Now, in addition to revealing billions of dollars in financing from domestic and foreign sources such as the Qatar sovereign wealth fund and Saudi Prince Alwaleed bin Talal, Musk is also set to help finance his Twitter takeover with support from Yahoo owner Apollo Global Management, which is apparently set to — along with partners — provide over $1 billion (if the deal actually finalizes, presumably).

In addition, Musk’s actions in relation to Twitter have reportedly drawn the interest of federal investigators at the Securities and Exchange Commission (SEC) and the Federal Trade Commission (FTC), although it’s unclear whether any probes from these authorities will actually derail the deal. As previously reported here, The Wall Street Journal reported the SEC “is probing Mr. Musk’s tardy submission of a public form that investors must file when they buy more than 5% of a company’s shares.” Disclosing such a purchase allows investors to see possibly looming control or influence of whatever company in which they’re interested. Daniel Taylor, who works as a University of Pennsylvania accounting professor, estimated that Musk saved big by waiting to publicly disclose his large stake in Twitter, which he procured before revealing his hopes to purchase the company. If Musk’s large financial stake in the platform had been public knowledge, then interest in the site could have spiked — along with the prices for the shares Musk later bought. (He didn’t procure his stake in Twitter all at once.) Taylor said Musk likely saved upwards of $143 million by delaying his required disclosure.