The talk about Elon Musk’s Twitter deal just keeps buzzing as new developments hit the news cycle again and again.
On Friday morning, things took another turn when the billionaire tweeted that his deal to buy the social media giant was “on hold.”
That had some asking whether the deal will fall through — but it could be a tactical move on Musk’s part.
His tweet said the deal was “temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users.”
Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of usershttps://t.co/Y2t0QMuuyn
— Elon Musk (@elonmusk) May 13, 2022
Musk linked a report from Reuters saying Twitter estimated in a quarterly filing that bogus accounts made up less than 5 percent of its “monetizable daily active users.”
The company said in the filing on May 2 that its estimate “may not accurately represent the actual number of such accounts.”
Musk made it clear when he made the $44 billion deal to buy the platform that he planned to rid it of fake accounts.
If our twitter bid succeeds, we will defeat the spam bots or die trying!
— Elon Musk (@elonmusk) April 21, 2022
This pause in the deal had some concerned that he might not finalize the purchase.
Twitter noted in the filing that it faced several risks until the deal with Musk is closed, including whether advertisers would continue to spend on the platform and the “potential uncertainty regarding our future plans and strategy,” Reuters reported.
The company’s stock took a tumble after Musk’s tweet about the pause, falling more than 20 percent in the premarket session, according to The Wall Street Journal.
But after tweeting about the pause in the deal, he followed up a couple of hours later with a tweet that said, “Still committed to acquisition.”
Still committed to acquisition
— Elon Musk (@elonmusk) May 13, 2022
What is Musk doing? Is he trying to back out of the deal?
Aron Solomon, the head of strategy and chief legal analyst for Esquire Digital, told The Western Journal in an email on Friday that he thinks Musk is trying to keep this deal constantly in the news.
“Musk’s endgame here involves keeping Twitter not just in the daily news cycle but seemingly the hourly,” Solomon said.
The pause on the deal could have been an excuse to get leverage to get out of the deal, but Musk put that idea to bed when he said he is dedicated to the acquisition.
“But I also don’t think the deal is ‘temporarily on hold’ because, well, deals like this don’t work that way. I’m not sure how the buyer of a $43 billion asset tells the seller ‘Imma pause for a bit,’” Solomon said.
Also, Musk has known about the company’s estimate of spam and fake accounts for a while now since the quarterly filing was made on May 2.
Tweeting about it a week and a half later seems to be a strategy to just keep the whole deal fresh in the news cycle.
It’s also important to remember that this pause on the deal is coming after several shakeups at Twitter.
On Thursday, Twitter CEO Parag Agrawal announced changes at the company that included the firings of consumer product leader Kayvon Beykpour as well as the head of revenue product, Bruce Falck.
He also announced a pause on most of the company’s hiring as well as other cost-cutting moves.
These internal shifts at Twitter play a role in the ongoing deal and show that Musk is already influencing the platform. That would indicate that his purchase will keep moving forward.
“Musk already has internal eyes and ears in Twitter to recognize who’s friend and who’s foe,” Solomon said. “He’s going to clear out as many executives and managers as possible before he arrives. And he’s going to do it with a blunt instrument. Fire first and ask questions later.”
“He tells the existing management team that they either need to execute on his strategic calls now or he’s just going to come in and clear out everyone responsible for Twitter’s current strategy and trajectory — even more firings,” Solomon added.
Do you think that Musk’s ownership of Twitter will drastically change the platform?
Yes: 86% (19 Votes)
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Musk has already made it clear that he has big plans for Twitter in order to put it on a more profitable trajectory. The billionaire will move to cut costs and make operating changes to improve the company’s bottom line, according to the Wall Street Journal, and he has told investors that an initial public offering could come in just a few years.
So this temporary hold on the deal should not have anyone panicking.
It seems to just be part of Musk’s process in keeping up the publicity on him and the deal.
“So we don’t have all the answers today (we never do),” Solomon said, “but it’s going to be a particularly interesting week ahead in the Twitterverse.”