Elon Musk stops the purchase of Twitter by fake users | International

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 Elon Musk stops the purchase of Twitter by fake users |  International

In a surprising plot twist, South African tycoon Elon Musk decided this Friday morning to suspend the purchase process he executed on Twitter Inc, owner of the Twitter social network.

(Will he buy or not? Elon Musk puts Twitter acquisition on hold for now.)

According to Musk, the measure is “temporary” and it remains to obtain the data on the false users that the platform has.

“Twitter deal is temporarily suspended pending details supporting calculation that fake or spam accounts account for less than 5% of users,” Musk wrote, citing an estimate by the social network itself published by the Reuters agency.

According to the press release, Twitter estimated that fake or spam accounts were less than 5% of its monetizable active users during the first three months of the year.

Specifically, the company reported 229 million users to whom it offered advertising in this period of time.

(The market is less confident that Elon Musk will buy Twitter.)

A couple of hours later, after casting doubt on the takeover process and causing his stock to plunge on Wall Street, Musk came forward and wrote: “I am still committed to the takeover.”

It is important to remember that the novel for the purchase of Twitter Inc began at the beginning of April and towards the end of the month, on the 25th specifically, the richest man in the world according to Forbes magazine announced a purchase agreement for US$44 billion and a payment to each investor of US$54.20 per shareand promising that the eponymous social network was “better than ever.”

Musk, founder of the luxury electric vehicle company Tesla, must contribute $21 billion from his own pocket and $23 billion through bank loans.

In recent weeks, according to the EFE agency, several investment funds and other millionaires have agreed to contribute US$7 billion of the US$21 billion that Elon Musk promised to pay on his own.

Among the tycoons backing Musk are Oracle co-founder Larry Ellison; the financial firm Sequoia; cryptocurrency exchange Binance and Saudi Prince Ali Walid bin Talal.

Raúl Ávila, a business expert, pointed out that this decision by Musk, although it will influence the actions, will also “It is going to refer a bit to the way in which the ‘more human’ strategy that the businessman has already put on Twitter is being viewed”.

“They want to act as a filter and humanize the network a little more (…) This is being an adjustment issue that, obviously, is generating suspicion in investors and in the markets because they would think that in these initial phases it would already be contemplated this”, added the also university professor.

“Musk’s takeover of Twitter was always meant to be a bumpy road, and now it’s at risk of skidding,” dsaid the analyst Susannah Streeter, from Hargreaves Landsdown, reviewed the AFP agency.

According to her, the number of spam and fake accounts – and, conversely, the number of real accounts – is a key figure because future sources of income will depend on advertising or paid subscriptions.

In her turn, analyst Susannah Streeter, from Hargreaves Lansdown, told Reuters that “this 5% metric has been available for some time. She clearly would have seen it already (…) So it may well be more part of the strategy to lower the price ”.

Among the changes raised by Musk a month ago when he announced the purchase are the exit from the listing on the New York Stock Exchange and the creation of a possible button to edit tweets.

BesidesMusk commented that he would temporarily occupy the position of CEO of the firm and that, after about three years, he would sell the company again.

Twitter Inc earned US$513 million in the first quarter of this year, which is seven times more than a year earlier, specifically, 655% more.

THE FALL IN THE MARKET

With Elon Musk’s announcement of the purchase process, Twitter shares plunged before the start of trading in New York. Immediately after the businessman’s message, shares of Twitter fell in pre-open electronic trading almost 20% to close around $36.5 a share.

The shares began to recover after the announcement of Musk’s commitment and closed the trading day with a value of US$40.72, that is, a drop of 9.67%.

ROBERTO CASAS LUGO

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