Twitter shares tumbled late Thursday after the Washington Post reported that Elon Musk’s $44 billion deal to buy the social media giant is in jeopardy.
The richest man in the world has previously expressed concerns, even hinting that he could back out of the deal over concerns about what he believes to be numerous fake accounts.
However, according to the Post, Musk wasn’t able to determine the percentage of Twitter accounts that aren’t genuine, despite gaining access to internal data.
While Musk has previously made comments questioning his commitment to the deal, the latest report quotes an anonymous source as saying his team is preparing for a “change of direction.”
Twitter shares, already trading below the price offered by Musk, fell about four percent in after-market trading following the news.
“The Twitter soap opera is clearly coming to some kind of finale in the coming months as Musk makes the decision to stay (at a lower price) or leave,” Wedbush analyst Dan Ives said in a note to investors.
“The Twitter deal has clearly wreaked havoc on Twitter.”
Ives expected Musk to reveal details about his concerns about fake accounts in the coming weeks.
During last month’s Qatar Economic Forum, Musk said his Twitter purchase was held up by “very important” questions about the number of fake users on the social network.
“So we’re still waiting for a resolution on this matter, and it’s a very important matter,” the Tesla auto and SpaceX exploration chief said via a video link to the gathering.
Twitter executives have found that less than five percent of accounts are fake, with Musk saying he believes the number is much higher.
Musk said there were also questions about Twitter’s debt.
The chances of Musk buying Twitter as originally negotiated are slim, Ives said.
Wedbush put the chance that the deal would go through at a lower price at 60 percent, leaving the door open to the possibility that Musk will try to get away with paying a required $1 billion breakup fee.
#Elon #Musk #deal #buy #Twitter #threat #report
