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Due to Fake Accounts: Twitter Shares Tumble at End of Negotiations: Musk “Temporarily” Suspends Twitter Acquisition | news

temporarily suspended on Friday. Musk wrote that first he wanted to wait for the calculations to show that accounts with no real users actually account for less than five percent.

. The online service published this estimate a few days ago in its detailed quarterly report.

Twitter named the number of 229 million first-quarter users the service can reach with its ads. The service does not count fake accounts clearly identified in user numbers. However, Twitter recently had to admit that slightly inflated user numbers have been reported since 2019 due to an error. However, the deviations were quite small with up to nearly two million users.

Twitter named the number of 229 million first-quarter users the service can reach with its ads. The service does not count fake accounts clearly identified in user numbers. However, Twitter recently had to admit that slightly inflated user numbers have been reported since 2019 due to an error. However, the deviations were quite small with up to nearly two million users. Twitter released the five percent estimate a few days ago in its detailed quarterly report.

It is unclear whether Musk could use the allegation that Twitter provided inaccurate information on the number of fake accounts to exit the deal or lower his offer. After all, he had given up on the usual pre-agreement review of Twitter books.

Twitter and Musk both agreed on a $ 1 billion fine if either party canceled the deal. But experts didn’t think that meant Musk could change his mind without explanation and be off the hook with a billion dollars.

The head of the electric car company Tesla had agreed with the Twitter board on an agreement worth about 44 billion dollars (about 42.3 billion euros). But it still depends on a sufficient number of shareholders who want to sell their shares to him. Twitter and Musk previously wanted to complete the acquisition by the end of the year. In recent months, it has already bought a good 9% stake in Twitter on the stock exchange.

In recent days, other problems have also emerged for the agreement. Musk originally wanted to borrow about $ 12 billion of the purchase price, which would be secured with his Tesla stock. But after Tesla stock plunged from around $ 1,000 to just $ 728 on Thursday, that plan became increasingly unfavorable to him. Bloomberg Finance Service reported Thursday that Musk is looking for alternative funding sources instead of the equity-backed loan.

Musk’s announcement also sheds new light on Twitter CEO Parag Agrawal’s radical moves on Thursday. He had kicked out the product manager and top manager responsible for sales development and imposed a hiring freeze.


Musk: He still wants to take control of Twitter

Tech billionaire Elon Musk said he remains interested in Twitter after previously unilaterally canceled the deal. Musk tweeted on Friday with no further details that he would stick to the acquisition plans.

Twitter shares plummet

The Twitter acquisition, temporarily suspended by Elon Musk, caused the online service’s stock to plummet on Friday. At the end of trading, New York Stock Exchange shares fell 9.67% to a closing price of $ 40.72. In pre-market trading, Twitter had even plummeted by as much as 25%.

Musk had promised Twitter shareholders $ 54.20 per share in the event of an acquisition. However, the paper came out Thursday at a hefty $ 45 share, a sign of skepticism among investors that Musk would actually go through with the deal.

Things could get even worse for shareholders as Twitter’s share price plummets. Analysts at Hindenburg Research had already warned earlier this week that the head of electric car maker Tesla had all the trump cards in hand since Twitter management accepted his offer after initial hesitations. Experts predict that if Musk withdraws his offer, Twitter’s shares will likely lose half in value. Twitter closed at just under $ 50 last Friday. If the experts are right, the value would be around $ 25 per share. For comparison: After Musk’s takeover bid, analysts’ average price target for Twitter stock jumped to a whopping $ 53 and thus to the level of Musk’s proposed purchase price.

It was foreseeable that Musk’s acquisition of Twitter would be a “bumpy ride,” commented Susannah Streeter, analyst at Hargreaves Landsdown. The number of actually active users of the service is a key indicator for evaluating future revenue from advertising and paid subscriptions. It is also questionable whether the number of so-called fake accounts, which are not supported by real users, is the real reason for Musk’s hesitation. Because Musk wanted to promote freedom of expression with Twitter rather than raise financial values ​​with the social network. The US $ 44 billion purchase price is high and the company may now want to go back on the price.

Editorial financeen.net / AUSTIN (dpa-AFX)

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