Elon Musk said on Friday his $44 billion deal to take Twitter (NYSE:TWTR) private is “temporarily on hold”, while the two sides wrangle over the extent of fake and spam accounts on the social media network.
Twitter had said in a filing on Thursday that such accounts represent less than 5% of the overall total of accounts using the network. Musk has indicated that he thinks it’s higher, and has said that getting them off the network would be one of his top priorities if his deal goes through.
The likelihood of the deal closing has, however, fallen for other reasons this week, owing to the sharp drop in the value of Tesla (NASDAQ:TSLA) shares, which Musk was due to use as collateral for a $12 billion margin loan from Morgan Stanley (NYSE:MS) to finance the deal. Bloomberg reported on Thursday that Musk was looking at raising $6 billion in preferred equity from the company instead, reducing the amount he would have to borrow to get the deal over the line.
Twitter stock fell 23% in premarket trading in response to the news, as market participants assigned a higher probability to the deal falling through. By 6:05 AM ET (1005 GMT), it was indicated at $35.24 a share, around 10% below where it was trading before Musk announced his offer of $54.20 a share.