Elon Musk temporarily suspended deal to buy Twitter

Wegen Fake-Accounts

He only trusts his own calculations: Elon Musk temporarily puts the deal to buy Twitter on hold

Elon Musk does not trust Twitter’s official information on the proportion of fake profiles. Therefore he wants to wait with the purchase of the short message service. This also has consequences for the CS.

The Tesla boss does not want to buy Twitter after all.

Keystone

Technology entrepreneur Elon Musk temporarily put his deal to buy Twitter on hold on Friday. In a message on the short message service, the multi-billionaire indicated that he did not trust official information from Twitter about the proportion of fake accounts on the platform. He first wanted to wait for calculations that accounts for which there are no real users actually accounted for less than five percent, he wrote. Twitter published this estimate earlier this week, with reference to figures for the first three months of 2022. In a separate statement, Musk also wrote that he was still “determined” to take over the internet company.

Credit Suisse subsidiary acts as Lender

The fall in Twitter stock slowed somewhat after Musk’s second tweet. After the start of trading, the paper on the New York Stock Exchange fell by a little more than 10 percent and was quoted at around $40. That’s a far cry from the $54.20 a share Musk had promised shareholders. The paper went out of business on Thursday at $45.08 – a sign of investor skepticism that Musk will actually complete the takeover of Twitter.

One reason for this is the complex model that the richest man in the world wants to use to finance the takeover. Musk received commitments from 19 investors who want to contribute more than $7 billion. Also among the sponsors are a Saudi prince and Larry Ellison, co-founder of Oracle.

That pledge, which was made public in early May, enabled the halving of an original $12.5 billion loan backed by Tesla stock. A branch of the major Swiss bank Credit Suisse is also involved in this financing package.

Originally, the CS branch in the Cayman Islands injected $1.25 billion, or the equivalent of 10 percent of the entire loan made by Musk’s house bank Morgan Stanley. This “margin” loan now amounts to $6.3 billion, according to a filing with the SEC. Credit Suisse’s stake will have been reduced to $630 million. Musk intends to forgo the loan to buy Twitter stock altogether, American financial publications reported this week. But to do that, he would have to find other investors.

Musk, who also serves as CEO of electric car maker Tesla, is notorious on Wall Street for the large loans he borrows against his Tesla shares. The security has lost massively in value on the stock exchange in the past month; on Friday, however, the share on the Nasdaq technology exchange rose by 5 percent at the start of trading. The takeover of Twitter was supposed to be completed by the end of the year. Musk then wants to take the group off the stock market, at least temporarily. He owns around 9 percent of the shares and is the second-largest shareholder in the technology company after institutional investors Vanguard Group. (rr/dpa)