Elon Musk, the man famous for his riches and visionary companies such as Tesla & SpaceX, finally abandoned his Twitter takeover deal. The reason behind abandoning the deal was the number of fake accounts on the social media platform!
According to the available data, Elon Musk was about to spend 37 billion on buying Twitter. However, some disagreements surfaced very soon when Elon Musk questioned the data, which revealed that only 5% of Twitter profiles are fake.
According to Mr Elon Musk, the number of bogus accounts was around 330 million (20%), which is 4 times higher than Twitter's 5% estimate. While Twitter gave the 'firehouse' access to Elon's team to view real-time tweets, no one from the management explained how the 5% figure was calculated in the first place.
Twitter Stock Down On No Deal
As a result of dropping the Twitter deal by Elon Musk, the shares of Twitter reached $37.12 after dropping 4.5%.
According to an expert analyst, the chance of a deal taking place at a $54.20 share price was only 5%. On the other hand, the chances of Mr Musk walking away from buying Twitter was 35%!
But just walking away from the deal will not be so simple for Elon Musk. According to the sources, Elon Musk would still need to pay a whooping 831 million GBP as a 'Break fee' and even a possible legal battle.
There is a possibility that Mr Elon Musk was hoping to close the deal at a much lower price than what was agreed upon in the first place. If that's the case, then the abandoning of the Twitter deal by Elon Musk shows that he didn't get his way!
And this slashing of the deal hasn't just affected Twitter, though - It has also dented the stock value of Tesla (electric car maker), which accounts for the bulk of Musk's fortune. In fact, the share price of Tesla dropped 23% after this news!