Musk Sends Twitter Shares on Rollercoaster After Saying Deal Is 'On Hold,' Then Saying 'Still Committed'

Musk sent Twitter shares falling more than 15 percent in pre-market trading after stating that his acquisition of Twitter is "temporarily on hold" until he gets more information about the number of false or fake accounts on the social media network.

“Still committed to acquisition,” Musk, the world’s richest man, later stated on Twitter following reactions.

The announcement came weeks after the Tesla's CEO reached a deal with Twitter to take the company private for $54.20 a share, putting the firm’s value at about $44 billion.

Twitter's stock is currently trading below $42, which is roughly a 25 percent discount to the $54.20 purchase price.

According to market analysts, the likelihood of a takeover is decreasing following Musk's announcement. However, because Twitter currently trades at a substantially higher valuation multiple than Facebook, they say, investors will be disappointed if the acquisition falls through as shares will collapse.

Actual user numbers could affect the valuation of the company.

Twitter claims that bots or fake accounts make up less than 5 percent of the platform's users. Some people, however, question these numbers.

Rumble's founder Chris Pavlovski repeated these claims, adding that Musk’s move is “extremely smart.”

Truth Social is using Rumble's cloud infrastructure.

“He needs to do his due diligence” on user numbers, Pavlovski told FOX Business' Maria Bartiromo on Friday.

When comparing user engagements on Twitter and Truth Social, he noted that "it's very obvious that there's something happening" on Twitter.

There’s an “enormous gap” in terms of engagements, he said. “You would see significantly more engagement on Truth than you would see on Twitter.”

According to Onur Varol, a researcher at Northeastern's Network Science Institute, a single person can sometimes be the "master" of an army of hundreds of thousands of bots.

But not everyone is convinced that the deal has been put temporarily on hold.

"Deals like this don’t work that way," Aron Solomon, chief legal analyst, Esquire Digital, told The Epoch Times. "I’m not sure how the buyer of a $43 billion asset tells the seller 'I'm going to grab an espresso and think about this a bit. Please hold.'"

That said, this is not a typical hiccup, Solomon stated. He said Musk's tweet came after the news of several executives and managers were fired.

Since Elon Musk purchased a 9.2 percent stake in Twitter, and then later announced intentions to acquire the social media platform, it has been a volatile situation.

The latest wrinkle in this story is the Securities and Exchange Commission (SEC) launching a probe into Musk's trading involvement in Twitter.

Musk had initially purchased 5 percent of Twitter shares on March 24, but he did not disclose this information within ten days. It is believed that if he had immediately revealed his 5 percent stake, investors would have rushed into the tech company and bought shares.

Market experts estimate Musk would have saved approximately $140 million by not disclosing his sizable purchase.

It is unclear if SEC will pursue this development any further. In 2008, the SEC sued him over allegations of making false statements on Twitter about gathering enough funding to take Tesla Motors private. He settled the case by paying a $20 million fine, but Musk denied that he lied and noted he felt pressured to settle the SEC investigation.

Activist investors are required to adhere to the anti-trust filing rules if they acquire shares that surpass a certain threshold and their assets are north of $20 million. Passive investors are exempt from this rule if they hold less than 10 percent of shares and do not intend to direct day-to-day business decisions.

If Musk is found guilty of this violation, the FTC could slap a fine of up to $43,792 per day.

For this acquisition deal, Musk secured $25.5 billion in loans, backed in part by a portion of his stake in Tesla. He had also promised to provide nearly $21 billion in cash.

A securities filing on May 5 showed that Musk secured new financing from a group of investors, including a Saudi prince and Oracle co-founder Larry Ellison for his deal.

With the new money, the margin loan amount backed by Tesla shares will be reduced to $6.25 billion from $12.5 billion; the equity commitment has now increased to $27.25 billion from $21 billion, according to the filing.

Should Elon Musk abandon the deal, he would be legally required to pay a $1 billion termination fee. Twitter would also be forced to pay a $1 billion breakup fee if it chooses to exit the deal for a better offer.

Earlier this week, Musk revealed that he would reverse Twitter's permanent ban on Trump.

"I think that was a mistake because it alienated a large part of the country and did not ultimately result in Donald Trump not having a voice," Musk said virtually at a Future of the Car summit on Tuesday. "So I think this may end up being frankly worse than having a single forum where everyone can debate. I guess the answer is that I would reverse the permanent ban."

"Biden's mistake is that he thinks he was elected to transform the country, but actually everyone just wanted less drama," Musk tweeted, adding that he thinks a "less divisive candidate would be better in 2024."