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Elon Musk says Twitter deal now 'on hold' — what's going on?

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(Image credit: BRENDAN SMIALOWSKI / Getty)

Elon Musk has dramatically paused his purchase of Twitter, due to concerns over exactly how many spam/fake accounts there are on the social network,

Musk agreed a $44 billion deal to buy Twitter last month, but in a tweet this morning said that the takeover is "temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users."

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Shares in Twitter immediately fell by about 20 percent after the announcement, but Musk later posted that he was “still committed to acquisition” and they have since recovered to stand at around 11% down.

The billionaire businessman announced last month that he was buying Twitter, after several weeks of hinting that he wanted to do so. 

He’s previously suggested that removing “spam bots” from the platform would be a priority, and with good reason: Twitter is notorious for spam activity, and without knowing how many there are it would be difficult to establish exactly how many 'real' users the service has.

Alongside his tweet, Musk shared a Reuters article that reported on Twitter's filing to the US regulator earlier this month. In the filing, Twitter estimated that fewer than 5% of its monetizable daily active users were bots or spam accounts. But Musk appears to want hard proof of that fact before the deal goes any further.

Musk won't necessarily want to walk away from the deal lightly: he's agreed to pay a $1 billion break fee to Twitter if he does so. Then again, he is the richest man in the world, with an estimated fortune of more than $220 billion, so he can afford it more than most.

That said, some commentators saw the move as an indication that Musk was potentially seeking to negotiate a lower deal price. As respected analyst Daniel Ives of Wedbush Securities tweeted, "the Street will view this deal as 1) likely falling apart, 2) Musk negotiating for a lower deal price, or 3) Musk simply walking away with a $1 billion breakup fee."

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Musk has been a key figure in Twitter's recent history. He has 92.7m followers and posts multiple times a day. His tweets have the power to send crypto funds soaring (or, occasionally, plunging) and his vast fanbase hang on his every utterance. 

He's always said the purchase of the social network was about protecting free speech, stating in his press release to accompany the deal that "Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated." 

And he specifically called out spam bots in that same release, stating that "I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans."

This is a developing story. We'll update it as we get more details.

As U.K. Editor in Chief on Tom’s Guide, Marc is responsible for the site’s U.K.-focused output as well as overseeing all gaming, streaming, audio, TV, entertainment, how-to and cameras coverage. He previously edited the tech website Stuff and has tested and written about phones, tablets, wearables, streaming boxes, smart home devices, Bluetooth speakers, games and much more. He also spent years on a music magazine, where his duties mainly involved spoiling other people’s fun, and on a car magazine. An avid photographer, Marc likes nothing better than taking pictures of very small things (bugs, his daughters) or very big things (distant galaxies). When he gets time, he also enjoys gaming (console and mobile), cycling and attempting to watch as much sport as any human can (particularly cricket).