MercoPress. South Atlantic News Agency

Musk puts Twitter buy-over on hold over fudgy financial statements

The world's richest person is still committed to the transaction, he said

Billionaire Elon Musk Friday announced he was having second thoughts about buying over Twitter, prompting the social network's shares to plunge 20% in early trading.

The entrepreneur said he was still committed to the transaction but first needed some issues regarding Twitter's financial statements to be settled. Musk's deal to buy Twitter included a $1 billion fee if he pulled out of the deal.

Twitter Inc. released an official statement May 2, indicating that fake profiles represented less than 5% of active users. According to Musk, the number of spam accounts may affect his goals of monetizing the business by selling online advertising.

Musk also insisted on his plans to reinstate former US President Donald Trump's account. He stressed, however, that he was not against some content being removed from the platform and that repeat offenders of the site's rules be temporarily suspended, but he does not believe in permanent expulsions like Trump's.

Musk had agreed to purchase the company for about US$44 billion earlier this month. Twitter's value, calculated based on its share price, has fallen in recent weeks along with a broader decline in tech stocks. Friday morning Twitter's value had fallen to US$35 billion, it was reported.

While the deal has yet to be finalized, Twitter has already shown signs of major changes. On Thursday, the company sacked two executives and enacted a hiring freeze.

Bloomberg's Billionaire Index still counts Musk as the world's richest person, but his net worth is down by nearly 20% (about $56 billion) in 2022, due in large part to a sharp drop in the stock price of Tesla, the company of which he is CEO. Some of the money Musk has taken out as a loan for the deal is backed by Tesla stock.

Twitter has had a history of fighting fake, spam and bot accounts, some of which were found to be spreading misinformation.