Elon Musk Says Twitter Deal Is 'On Hold' Over Fake Accounts

SpaceX and Tesla CEO Elon Musk has said that his $44 billion deal to acquire Twitter is "temporarily on hold," pending details over fake accounts.

Shares in the social media giant fell 17.7 percent to $37.10 in pre-market trading, their lowest level since Musk disclosed his stake in the company and made his offer to take it private for $54.20 per share.

Musk, who is the world's richest man, agreed to buy Twitter on April 14, after previously acquiring 9.1 percent of the company's stock for $2.64 billion, becoming its largest shareholder.

"Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users," Musk tweeted on Friday.

With his tweet, the businessman posted a link to a Reuters story from May 2 showing Twitter making that estimate about spam accounts, citing a company filing.

In the quarterly filing, released on April 28, Twitter warned that in making the determination, the company's estimation of false accounts may not accurately represent the real number, which may be higher.

"We are continually seeking to improve our ability to estimate the total number of spam accounts and eliminate them from the calculation of our mDAU [Number of monetizable daily active Twitter users], and have made improvements in our spam detection capabilities that have resulted in the suspension of a large number of spam, malicious automation, and fake accounts," the filing added.

It is not clear why Musk would suspend the deal due to this disclosure, that was made more than two weeks ago. If Musk did cancel his planned acquisition of Twitter, the Tesla CEO would have to pay the social media platform a $1 billion breakup fee.

Newsweek has conducted Twitter and Musk's team for comment.

The entrepreneur has said that one of his priorities when taking over the social media platform would be to remove "spam bots" from it and find a way of verifying all humans.

That drew some concern from some analysts that Twitter might require more access to its users' data in order to identify them.

Musk has also been supportive of free speech on the platform. Controversially, he has said he will re-instate the Twitter account of former president Donald Trump. The social media account was Trump's main mouthpiece until the January 6, 2021 insurrection at the Capitol Building in Washington, D.C. He was banned from the platform shortly after the riots for allegedly inciting violence and violating the platform's rules.

Musk said at a Financial Times event on Tuesday that Twitter's decision to ban the Republican president was "morally bad" and "foolish in the extreme." He added that he believed it helped divide the U.S. and "alienated a large part of the country."

Since then, Trump has started his own social media platform, called "Truth Social."

Update 5/13/22, 8:50 a.m. EDT: This article has been updated to include more details.

Elon Musk at Met Gala
Elon Musk attends the 2022 Met Gala celebrating "In America: An Anthology of Fashion" at the Metropolitan Museum of Art on May 02, 2022 in New York City. Musk has said that his $44 billion deal to acquire Twitter is “temporarily on hold”, pending details over fake accounts. Dimitrios Kambouris