Shutterstock

Elon Musk says Twitter Deal on Hold Over Fake Accounts

Elon Musk tweeted that his $44 billion deal to purchase Twitter is temporarily on hold pending an investigation into the number of fake accounts on the platform, even as top leaders got the boot and company stock fell 15%.

Elon Musk will put Twitter purchase on hold while fake accounts investigated

Elon Musk tweeted early on Friday that he is putting the brakes on his move to purchase Twitter for $44 billion while the number of fake accounts on the site were investigated.

“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users,” Musk wrote.

Two hours later, Musk added that the temporary hold didn’t mean he had lost interest in purchasing the social media platform.

“Still committed to acquisition,” Musk followed up, the Washington Post reported.

Twitter stock tumbles

Musk’s announcement sent the price of Twitter shares tumbling in premarket trading on Friday.

Twitter stock fell 15 percent following the announcement by Musk, Breitbart reported.

Twitter stock was already plummeting before Musk made the announcement. On Thursday, CNBC reported that Twitter’s shares had fallen to about $46, well below Elon Musk’s purchase price of $54.20. The selloff of Twitter shares has resulted in a $9 billion gap between the value of Twitter and the $44 billion Musk agreed to pay on April 27. Overall, Twitter has slid almost 13% since it hit its highest mark for the year in late April.

Twitter ousts two top leaders, cuts spending, halts most new hires

On Thursday, reports emerged that two of the top leaders of Twitter were no longer with the company.

“Kayvon Beykpour, Twitter’s general manager, is leaving and will be replaced by Jay Sullivan,” the New York Times reported. “Bruce Falck, Twitter’s general manager for revenue, is also departing the company.”

Beykpour later tweeted that he was pushed out.

“The truth is that this isn’t how and when I imagined leaving Twitter, and this wasn’t my decision,” Beykpour wrote on Twitter, the Daily Wire reported. “Parag asked me to leave after letting me know that he wants to take the team in a different direction.”

An internal company memo from CEO Parag Agrawal obtained by the New York Times said Twitter was also halting most new hiring, as well as cutting back on spending due in part to the company not achieving key growth metrics.

Feds open investigation into Elon Musk Twitter purchase

On Wednesday, reports emerged that the US government had opened an investigation into Elon Musk’s business dealings surrounding his recent $44 billion purchase of Twitter, the Daily Wire reported.

“The Securities and Exchange Commission 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,” the Wall Street Journal reported. “The disclosure functions as an early sign to shareholders and companies that a significant investor could seek to control or influence a company.”

The report added that the disclosure Musk made to the SEC on April 4 was at least ten days late, which created speculation that the move may have saved him over $140 million as share prices may have been higher if the public knew about his ownership of 5% of the company.