The landmark deal that would see Elon Musk takeover Twitter and make it private has hit a stumbling block as Musk wants to verify the amount of fake accounts.
Tesla (TSLA) ceo Elon Musk said that his $42 billion takeover of social media giant Twitter (TWTR) has been put on hold till it is verified that spam or fake accounts represent less than 5% of the total users.
- Twitter estimates that less than 5% of the accounts on the site are spam or fake, according to a SEC filing. Musk claimed in april that he wanted to authenticate every Twitter user.
- Twitter’s share price were down over 17% at $37.2 in pre-market trading, while Tesla shares were up over 5% at $769.27 in pre-market trading.
- The merger agreement, on page 30 of the filing, states that Musk will have to pay $1 billion in the form of a termination fee if the takeover falls through.
- On Thursday, Bloomberg reported that Musk is seeking new funding for the Twitter takeover, as he looks to scrap previous plans to take a margin loan against Tesla stock.
UPDATE (May 13, 10:50 UTC): Adds details about termination fee and Musk’s pursuit of new funding in fourth and fifth bullet. Updates headline and share price.