Elon Musk ‘still committed’ to Twitter deal after putting it on hold – business live – The Guardian
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Elon Musk has said his $44bn takeover of Twitter is “temporarily on hold” after the social media platform claimed that less than 5% of its users were spam or fake accounts.
The Tesla chief tweeted on Friday morning that the deal was being frozen while he awaited details behind Twitter’s assertion.
Musk announced the move alongside a link to a Reuters article published on 2 May that referred to a filing with the US financial regulator, in which Twitter claimed that false or spam accounts represented less than 5% of its daily average 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
Musk has railed at automated Twitter accounts – which are not run manually – and said after announcing the takeover that he wanted to improve the platform by “authenticating all humans”. He has agreed to pay a $1bn break fee to Twitter if he walks away from the deal.
The news sent Twitter’s shares down about 23% in pre-market trading, on concerns that the deal could collapse.
Elon Musk sowed new chaos into the market today by putting his takeover bid for Twitter on hold, explains Bloomberg:
But they point out that doubts had already been swirling about the deal:
.css-knbk2a{height:1em;width:1.5em;margin-right:3px;vertical-align:baseline;fill:#C70000;}Doubts have grown in recent days that Musk would be able to pull off his acquisition of Twitter, and that the entrepreneur may consider dropping his bidding price for the micro-blogging site. The whole transaction has been a frenzied and untraditional affair, largely played out on Twitter.
Musk went from being “just” a prolific user to revealing a more than 9% stake in the company and then launching an unsolicited takeover offer — without detailed financing plans — within a matter of weeks. It all came together at breakneck speed in part because Musk waived the chance to look at Twitter’s finances beyond what was publicly available.
And on Musk’s concerns about spam accounts…the calculation that less than 5% of accounts are fake has been used by Twitter for close to a decade.
Bloomberg adds:
.css-knbk2a{height:1em;width:1.5em;margin-right:3px;vertical-align:baseline;fill:#C70000;}The proposed takeover includes a $1 billion breakup fee for each party, which Musk will have to pay if he ends the deal or fails to deliver the acquisition funding as promised. It is unclear whether an update by Twitter on the number of fake accounts — if materially larger than 5% — would trigger a so-called material adverse effect clause, releasing Musk from the breakup fee.
More here.
Elon Musk sewed new chaos into the market over his takeover bid for Twitter on Friday.
He first claimed his offer was “temporarily on hold” and then maintaining he is “still committed” to the deal https://t.co/i8HxyZ06Tu pic.twitter.com/lKQhj4VqmS
Some snap reaction to the slide in US consumer confidence:
pretty striking consumer gloom
only 4 lower prints with the data going back to 1978 pic.twitter.com/xUd0L7Bg4F
Dismal US consumer confidence data – sinks to lowest since Aug 2011, current conditions index lowest since March 2009.
Back to the old ‘bad news is good news’ for risk assets as markets price in a less restrictive Fed? Nasdaq jumps 3%. pic.twitter.com/Ip8yqJywP0
US consumer confidence has taken another hefty knock this month, as inflation hits households.
The University of Michigan’s index of consumer sentiment has declined by 9.4% from April, reversing last month’s gains, to hit its lowest since 2011.
It dropped to just 59.1 for this month, compared with 82.9 a year ago before price started their steep climb.
The Index of Consumer Sentiment fell from 65.2 in April to 59.1 in May, the lowest reading since August 2011, according to preliminary data from the University of Michigan and Thomson Reuters. pic.twitter.com/PG59WfYW1k
The report says people haven’t been this downbeat on their financial situation in almost a decade, with inflation hitting confidence.
.css-knbk2a{height:1em;width:1.5em;margin-right:3px;vertical-align:baseline;fill:#C70000;}These declines were broad based–for current economic conditions as well as consumer expectations, and visible across income, age, education, geography, and political affiliation–continuing the general downward trend in sentiment over the past year.
Consumers’ assessment of their current financial situation relative to a year ago is at its lowest reading since 2013, with 36% of consumers attributing their negative assessment to inflation. Buying conditions for durables reached its lowest reading since the question began appearing on the monthly surveys in 1978, again primarily due to high prices.
Shares in Twitter have tumbled 10% in early trading.
They’ve dropped to $40.32, from $45 last night, on concerns that Elon Musk will walk away from the takeover, or attempt to renegotiate the price.
That widens the spread to Musk’s agreed offer of $54.20 — which shows a greater probability that it won’t happen, at least at that price:
$TWTR down 11.25% — with that in mind, The spread, a soft indication of how much Wall Street believes the takeover will be completed, has blown out to $13.80 at the open, the widest since deal announcement @elonmusk pic.twitter.com/MzZBLFs7B2
Wall Street has opened higher, on the final session of a turbulent week in which worries about slowing growth and rising interest rates hit stocks.
The S&P 500 index has jumped 1.4%, or 55 points, to 3,985 points, pulling away from bear market territory.
Consumer discretionary stocks, technology and energy are the top performing sectors.
Away from the Twitter deal, new bank lending in China has hit the weakest in nearly four and half years in April.
It suggests demand for credit from businesses and households weakened as new Covid-19 lockdowns were brought, weakening the economy.
Chinese banks extended 645.4 billion yuan ($95.14 billion) in new yuan loans in April, down about 80% from March and dipping to the lowest level since December 2017, according to the People’s Bank of China data, which missed forecasts.
Chinese new yuan loans drop sharply during the month of April as credit demand in the country significantly weakens. pic.twitter.com/e08TaOf5lm
Capital Economics said in a note.
.css-knbk2a{height:1em;width:1.5em;margin-right:3px;vertical-align:baseline;fill:#C70000;}“Lending was much weaker than expected last month as lockdowns weighed on credit demand. This should nudge the PBOC to announce further easing measures soon.
But the central bank continues to signal a relatively restrained approach.”
The US stock markets is set to rally, after a very turbulent week that saw tech stocks tumble hard:
U.S. STOCK INDEX FUTURES EXTEND GAINS, NASDAQ FUTURES LAST UP 2%
Twitter’s share price has recovered some of its earlier losses.
It’s currently down around 11% in pre-market trading, at $40, having dropped as low as $34 when Musk said the deal was on hold, from $45 last night.
Twitter 
https://t.co/i9zwIsWyS9 pic.twitter.com/vWXI6a8MNV
Of course, we’ve now got a good idea of what Twitter would be worth without Musk’s $54.20/share bid…
“Still committed to acquisition”
… but just out of curiosity let’s see where the stock would trade after the recent market selloff if I temporarily took my $54.20 offer off the table. https://t.co/w5kUMkinNJ
Elon Musk has now tweeted that he’s “Still committed” to the acquisition….
Still committed to acquisition
Elon Musk has said his $44bn takeover of Twitter is “temporarily on hold” after the social media platform claimed that less than 5% of its users were spam or fake accounts.
The Tesla chief tweeted on Friday morning that the deal was being frozen while he awaited details behind Twitter’s assertion.
Musk announced the move alongside a link to a Reuters article published on 2 May that referred to a filing with the US financial regulator, in which Twitter claimed that false or spam accounts represented less than 5% of its daily average 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
Musk has railed at automated Twitter accounts – which are not run manually – and said after announcing the takeover that he wanted to improve the platform by “authenticating all humans”. He has agreed to pay a $1bn break fee to Twitter if he walks away from the deal.
The news sent Twitter’s shares down about 23% in pre-market trading, on concerns that the deal could collapse.
Tech
via Inferse.com https://www.inferse.com
May 13, 2022 at 07:55AM