Tesla CEO Elon Musk has put his plans to buy Twitter ‘temporarily on hold’ over details around the number of spam and fake accounts present on the site.
Twitter shares fell by 17.7 per cent following the billionaires tweet on the matter.
He had agreed a £34.5bn deal to take over the social media giant last month, and pledged to improve free speech on the site and remove fake accounts.
But in a tweet on Friday, Mr Musk said the deal is now on hold ‘pending details supporting calculation that spam/fake accounts do indeed represent less than five per cent of users’.
His tweet linked to a report published earlier this month which said Twitter estimates spam and fake accounts comprise less than five per cent of its daily users.
It is unclear why this detail would compromise the deal, and the Tesla boss has not tweeted any further on the issue.
One industry expert told the Press Association that Mr Musk’s interest in the number of real and fake accounts on the site could be linked to his possible plans to boost Twitter revenue through user subscriptions and advertising.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said these figures were a ‘key metric’ in Musk’s plans for the platform, but said the delay could also be a tactic to try and reduce the price of the deal.
‘Musk’s Twitter takeover was always destined to be a bumpy ride, and now it risks hitting the skids over the number of fake accounts on the platform,’ she said.
‘Twitter’s share price plunged by around 18 per cent in pre-market trading following his tweet indicating the deal was temporarily on hold.
‘He is clearly intent on querying the company’s estimate that spam accounts make up less than 5% of active daily users – a key metric given that establishing an accurate number of real tweeters is considered to be key to future revenue streams via advertising or paid for subscriptions on the site.
‘There will also be questions raised over whether fake accounts are the real reason behind this delaying tactic, given that promoting free speech rather than focusing on wealth creation appeared to be his primary motivation for the takeover.
‘The $44bn price tag is huge, and it may be a strategy to row back on the amount he is prepared to pay to acquire the platform.’
The news coincides with Tesla’s decision to pull out of selling cars in India after it failed to secure lower import taxes, according to Reuters.
The electric car company has been in a deadlock with the Indian government on the matter and it has now abandoned its search for dealerships and reallocated some of its team.
The Indian government wants Tesla to commit to manufacturing its cars in the country before it will provide any concessions.