Elon Musk placed his $44 billion purchase for Twitter Inc on hold on Friday, claiming a lack of evidence in support of his calculation that spam and bogus accounts account for fewer than 5% of users.
In premarket trading, shares of the social networking firm plunged 17.7% to $37.10, the lowest since Musk revealed his ownership in the company in early April and made a “best and last” bid to take it private for $54.20 per share.
On Tuesday, when Twitter shares dipped below $46.75, the implied probability of the deal closing at the agreed price fell below 50% for the first time.
Twitter estimated earlier this month that fraudulent or spam accounts accounted for less than 5% of its monetizable daily active users in the first quarter, when it had 229 million users shown advertisements.
Musk tweeted on Friday, “Twitter deal on hold temporarily for details supporting computation that spam/fake accounts do actually comprise fewer than 5% of users.”
Musk, the world’s richest man and self-described free speech absolutist, has stated that removing “spam bots” from the platform would be one of his top goals.
A request for comment from Twitter was not immediately returned. Musk’s representatives and Tesla Inc were unavailable for comment at the time of publication.
Until the deal with Musk is finalised, Twitter faces various risks, including whether advertisers will continue to spend money on the platform due to “possible uncertainty over future objectives and strategy.
Twitter’s moderation policy has been criticised by Musk. He has stated that he wants Twitter’s algorithm to emphasise public tweets and that he opposes giving advertisers too much power on the platform.
He said earlier this week that if he acquires Twitter, he will lift the ban on former US President Donald Trump, suggesting his aim to reduce the site’s moderation.