Twitter shares fell 20% as Elon Musk’s $44 billion takeover deal was delayed.


Elon Musk announced on Friday that its planned $44 billion Twitter acquisition is “on hold.”

Following Musk’s remarks, Twitter shares fell about 20% during the early morning trading hours. Tesla shares are up 5%.

Musk agreed to pay Twitter $54.20 per share, but Twitter’s current share price is much lower.

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fake twitter account

Elon Musk has announced that the planned Twitter takeover has been delayed due to concerns about fake accounts.

The billionaire linked to a May 2 Reuters article citing financial data from Twitter indicating that fraudulent or spam accounts account for less than 5% of the company’s “monetable daily active users” in the first three months of 2022.

$1 billion in decommissioning fees

But Musk can’t withdraw from the Twitter takeover deal because he’ll have to pay a $1 billion dissolution fee. The situation is much more complicated than that.

Reverse bankruptcy fees apply if a transaction is not closed due to external factors such as regulatory brokerage or third-party financing issues.

DOGE total market cap at $11.10 billion on the weekend chart | Source: TradingView.com

According to senior M&A legal counsel who is aware of the situation, buyers can also withdraw if fraud is involved in the transaction.

A market downturn, such as the recent sell-off, which reduced Twitter’s market cap by more than $9 billion, wouldn’t be a good reason for Musk to have no farewell, breakup or closing fees.

Still, there is a good chance the deal will be closed. Musk tweeted that he was “still committed to the acquisition” two hours after his first tweet.

According to a source familiar with the situation, lawyers close to Musk persuaded him to send a follow-up tweet.

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Elon Musk has always believed in Dogecoin's potential as a competitive currency. (Legal Sports Betting)

Promote Dogecoin (DOGE)

Meanwhile, Musk made another bullish statement about the joke cryptocurrency Dogecoin (DOGE) amid a major market sell-off.

Tesla’s CEO confirmed that Dogecoin “has potential as a currency”. His remarks were in response to a statement by Dogecoin co-founder Billy Markus that he likes meme-based cryptocurrencies “because I know it’s stupid”.

Musk reaffirmed in his tweet that Dogecoin is the ideal cryptocurrency for trading. By comparison, he said, Bitcoin is more suitable as a kind of store of value.

Musk, known as ‘Dogefather’ in the cryptocurrency industry, also said that DOGE is ‘the people’s cryptocurrency’.

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Featured image from PGurus, chart from TradingView.com



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