Musk declares $44 billion deal ‘on hold’, citing spam account calculations Musk declares $44 billion deal ‘on hold’, explains the reason for spam account calculation
By Amit - May 13, 2022
New Delhia few moments ago
A few days ago, Elon Musk, the world’s richest man, made a deal to buy Twitter for $ 44 billion. Before the deal is finalized, Elon Musk has tweeted that this deal has been kept on hold for some time. He says that the exact calculation details of whether spam or fake accounts are really less than 5% on Twitter have not been revealed yet.
Recently, Twitter said in its filing that the number of spam accounts in its monetized daily active users (mDAUs) is less than 5% in the first quarter of 2022. However, the company also said that this is only an estimate and the number of spam accounts could be higher. Twitter shares fell more than 20% in the pre-market after the deal hold information surfaced.
There may be more spam accounts than expected
Twitter said, ‘We have done an internal review of the sample of the account. It estimated the number of spam accounts to account for less than 5% of mDAUs during the first quarter of 2022. Our estimate of spam accounts does not accurately reflect the actual number of such accounts. Its number may even be higher than our estimate.
Know about the deal
On April 14, Elon Musk offered to buy Twitter for $43 billion. Musk had said, “I am offering to buy a 100% stake at $54.20 per share at a 54% premium to the price the day before I started investing in Twitter.” This offer is my best and last offer and if it is not accepted, I will need to reconsider my position as a shareholder.
Musk owns a 9.2% stake in Twitter. Its information was revealed on 4 April. Musk may have offered $43 billion in the initial filing, but after Twitter’s approval of the deal on Monday, this figure reached $44 billion. What is the reason for the increase in the figure, it is not clear yet.
Where will Musk raise money for this deal?
Musk said in a new filing to the US Securities and Exchange Commission last week that the funding would be a mix of debt and cash. Investment bank Morgan Stanley and other lenders will provide $13 billion in group debt financing and a $12.5 billion loan against Tesla stock. Will raise $ 21 billion from his pocket. In such a situation, Musk had presented a plan to raise a total of $ 46.5 billion.
After the completion of this deal, Twitter will become a private company. Elon Musk will own it, as none of Musk or Twitter have mentioned any co-investors in their statements.