Twitter shares fell late Thursday after Washington posted a report that Elon Musk’s $44 billion deal to buy the social media giant is in jeopardy.
The world’s richest man has expressed skepticism before and even said he could walk away with the deal, which he believes has led to a spate of fake accounts. According to the post, however, Musk has been unable to determine the percentage of Twitter accounts that have been granted access, although they are not genuine.
While Musk has already made comments casting his commitment to the deal into doubt, the latest report, citing an unnamed source, said his team is preparing to “change direction.”
Twitter shares, which were already trading below Musk’s offering price, fell nearly four percent on the news in after-market trading. The Twitter drama is clearly coming to an end in some way or the other.
Wedbush analyst Dan Ives made the decision to stay or leave, Musk said in a note to investors. The Twitter deal has apparently caused chaos on Twitter.
Ives speculated that Musk would be voicing concerns about his fake records long ago. During the Qatar Economic Forum last month, Musk said that his Twitter purchases were halted due to very important questions about the number of fake users on the social network.
So we are still waiting for the resolution of that matter and it is a very important matter. Musk said he believes Twitter executives have firmly stated that less than five percent of accounts are fake. That number is much higher, Musk said, adding that there were also questions about Twitter’s debt.
Ives said Musk is less likely to buy Twitter than he originally negotiated. Wedbush settled the deal at 60 percent off the low price, leaving the door open to the possibility that Musk would try to get away with only paying a $1 billion breakup fee.