Twitter’s stock plunged on Friday as new worries emerged over Elon Musk‘s planned $44 billion acquisition of the platform. At market open, the stock plunged more than 10%, trading as low as $14 below the nominal purchase price of $54.20 per share.
The decrease was triggered by a series of ambiguous remarks from Musk, who said the acquisition was “temporarily on pause” pending an inquiry into the overall number of fake accounts on the site.
In a filing, Twitter stated that bots account for fewer than 5% of daily active users, although many feel the true amount is far higher.
Musk subsequently stressed that he was “still committed to the acquisition,” although there is still a lot of doubt about the deal.
There have been major market swings for both Twitter and Tesla, the source of the lion’s share of Musk’s personal fortune, since the terms of the agreement were formed.
As part of a larger market decline, Tesla stock has lost more than 25% since Musk made his offer on April 14th.
Because a portion of the cash was initially obtained through loans against Musk’s interest in Tesla, the decreasing share price might have a significant influence on Musk’s ability to finalise the deal.
However, according to Bloomberg, Musk has secured for new equity partners to help finance the acquisition, eliminating the need for the loan.
Twitter has also struggled, recently reporting an overcount of user numbers in its financial report and continuing to lose money. Recently, CEO Parag Agrawal sacked two top employees unexpectedly, creating serious doubts about the company’s future.
When combined with the market slump, some experts predict Musk may try to renegotiate for a cheaper price.
To read our blog on “Two Twitter execs have been fired, adding to Elon Musk’s takeover woes,” click here