Shares of Twitter plunged on Friday after Elon Musk said he would put his acquisition of the social media company “temporarily on hold,” adding additional confusion as to whether a deal will still happen as analysts predict that the Tesla billionaire could be looking for an excuse to back out or renegotiate a lower buying price.
Twitter’s stock fell roughly 10% on Friday after Musk said he would put his planned $44 billion takeover “on hold” until he finds out more about the number of fake and spam accounts on the platform.
Musk’s “bizarre” tweet will send the “Twitter circus show into a Friday the 13th horror show,” wrote Wedbush analyst Dan Ives, with “many questions and no concrete answers as to the path of this deal going forward.”
The markets are reacting as if he is going to back out of the deal, which could well be a possibility, according to Michael Hewson, chief markets analyst at CMC Markets, who added, “This is straight out of the Musk playbook, keeping shareholders on their toes.”
Musk’s decision was “very troubling” for investors—Twitter’s stock fell over 10% on Friday, and amid the wider market selloff this year, Musk could well be using the fake accounts as an excuse to “get out of the deal,” Ives adds .
While Musk might be getting nervous about following through, “separately, this move is likely to drive greater uncertainty and chaos within [Twitter]which could have negative implications on its own business prospects,” notes CFRA analyst Angelo Zino.
Amid the buzz generated by Musk’s offer to buy the company in April, Twitter shares are down just 4% so far in 2022—having surged over 20% last month alone—and are outperforming the rest of the market (the benchmark S&P 500 index has fall over 15%).