Twitter purchase falters: Musk says he is freezing the operation due to doubts about fake accounts


Elon Musk has announced that he has temporarily frozen the purchase of Twitter until the company provides him with reliable details that support that fake and spam accounts on the platform account for less than 5% of active users , as published on his Twitter profile . aforementioned social network.

Photo of Elon Musk while announcing the deal of Twitter
Image via Twitter Elon Musk

The announcement comes two weeks after Twitter reported in a statement that fake or spam accounts accounted for less than 5% of monetizable daily active users during the first quarter of 2022, Reuters reports.

Musk has just announced the freezing of the purchase process, so we will have to wait for more details. Despite this, in a subsequent tweet he has assured that he remains committed to the acquisition. Twitter, for the moment, has not commented on the matter.

On April 25, the executives of Twitter made it official that they had reached an agreement with Elon Musk to sell the social network to the South African tycoon. Since then, Musk has made several announcements about some changes he intended to make when he was in effective control of the platform. One of them, according to what he said, would be to vigorously pursue false accounts. Others, review the moderation policies.

All these intentions, in addition to the fact that the agreement was official on both sides, made one think that everything was closed and that there would be no surprises . Something that with Elon Musk involved can never be taken completely for granted.

Penalty for withdrawing from the purchase

If Musk ultimately backs down, he would face a potential $1 billion penalty for canceling the deal. This penalty is reflected in the purchase agreement and is applicable to both parties, according to Seeking Alpha.

The agreement states that “if the conditions of the obligations” of the sale are met, and one of the parties decides to cancel the transaction, whoever has decided to back out will be required to pay the aforementioned amount.

However, in that “if the conditions of the obligations are met” may be the crux of the matter, since if the agreement includes some type of clause referring to the number of fake accounts that Twitter has so that the sale is closed, Musk could retire without paying a single dollar.

There is also speculation that it could be a tactic by the tycoon to try to lower the price of the sale, estimated at 44,000 million dollars.