Buying a Twitter mask is in danger

Twitter shares fell late Thursday after a Washington Post report revealed that Elon Musk’s deal to buy the social media giant for $44 billion is at risk.

The world’s richest man had previously expressed doubts and even hinted that he might leave the deal for fear of the many fake accounts.

Despite access to internal data, the billionaire was unable to determine the percentage of fake profiles, according to the newspaper.

Although Musk has already made comments questioning his commitment to the deal, the latest report quoted an anonymous source as saying his team was preparing for a “change of direction.”

Twitter shares, which are already trading below the price offered by the entrepreneur, fell about 4% in the news.

“The Twitter soap opera will end in the coming months as Musk makes a decision to stay (at a lower price) or leave,” Dan Ives, an analyst at private equity firm Wedbush, said in a note.

Ives expects the Tesla co-founder to detail his concerns about fake accounts in the coming weeks.

During the Qatar Economic Forum last month, Musk said that the Twitter purchase was pending due to “very significant” issues related to the number of fake users on the social network.

“We are still waiting for a resolution to this matter, which is really important,” Musk said via a video link, noting that he also had questions about the social network’s debt.

Twitter executives claim that less than 5% of the accounts are fake, but the South African businessman is convinced the number is much higher.

The Wedbush analyst noted that the buying opportunities for the tech giant as originally negotiated are slim.

Wedbush pegged the chance of the deal happening at a 60% lower price, leaving the door open for Musk to try to get away with paying a $1 billion breakup fee.

Leave a Comment