Elon Musk’s Twitter takeover on hold

Elon Musk, the world’s richest man, has said his acquisition on Twitter is on hold after recent announcments from the company surrounding the prevalence of spam and bot acccounts on the platform.

Musk said he was waiting for information “supporting [the] calculation that spam/fake accounts do indeed represent less than 5 percent of users”. This announcement follows a report from Twitter two weeks ago saying that fake accounts made up less than 5 percent of daily users. The report was somewhat flexible in its assessment of spam accounts, something Musk will not be a fan of.

One of the big changes expected with Musk’s purchase was a crackdown on bot accounts and a renewed emphasis on personal verification. Musk wants people who sign up to Twitter have a more rigorous process passed to prove identity instead of just an email or phone number. This would do more to combat spam bots, as well as give authorities greater ability to prosecute those deemed to have broken speech laws.

“The actual number of false or spam accounts could be higher than we have estimated. We are continually seeking to improve our ability to estimate the total number of spam accounts,” the Twitter report said.

In pre-trading Twitter shares fell by 25 percent, emphasizing the scale of the threat posed by the aquisition on this announcement. Musk was already overpaying by over 10 percent a share with his $44 billion offer. If he pulls out of the purchase he has agreed to pay Twitter $1 billion.

The huge fee was agreed last month though it quickly scared investors. Tesla stocks have dropped sharply in the last two weeks amid fears of a selloff of Musk’s shares in order to finance the Twitter purchase. Hovering around the $1,000 a share mark a month ago, the price has shrunk to $728 by May 13.