Tesla CEO Elon Puts Twitter deal on Hold

Elon Musk is pumping the brakes on Twitter (TWTR) because it’s got something to prove. The deal will be on hold until Twitter can prove that only 5% of Twitter accounts are spam.

What’s the big deal? Spam accounts have plagued social media platforms for years now, and it’s messing with monetization.

  • In Q1, Twitter reported that it had 229 million accounts that were served ads.
  • If 5% of its accounts are fake, then that’s over 11.4 million accounts that are throwing off advertiser numbers.

Power move? Elon might believe that Twitter is more than 5% spam and could use this as negotiating leverage.

Elon’s initial offer to buy Twitter was $44 billion. He may end up paying less depending on the level of spam found.

  • Musk says he’s, “still committed to the acquisition,” but if he were to stop the deal, he’ll end up paying a $1 billion breakup fee. 

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