The Tesla and SpaceX mogul said he needs to make sure the fake accounts "do indeed represent less than 5%" of Twitter's users, as the company has estimated.



Elon Musk says his deal to buy Twitter for $44 billion is on pause. That announcement sent Twitter stock plunging, creating fresh turmoil for the company.

NPR tech correspondent Shannon Bond joins us now to unpack what is going on. Hey, Shannon.


CHANG: OK. So why does Elon Musk say he's putting this whole deal on hold now?

BOND: Well, in a tweet, of course, Musk said he has questions about just how many Twitter accounts are fake or tweeting spam. Now, Twitter regularly discloses how many fake accounts it has. And, you know, this is a number that matters because Twitter's business is selling ads, and advertisers don't want to pay for ads that aren't being seen by real people. In its latest filing, Twitter says less than 5% of accounts are fake. But Musk has said that getting rid of spam and automated bot accounts is a priority for how he wants to change Twitter. And so now he's saying he wants to look into these numbers himself. And so that's why he's putting this deal on hold.

CHANG: OK. So does this actually mean Musk might not buy Twitter after all?

BOND: Well, in a follow-up tweet, he said he is still committed to the deal. But look, Ailsa; Twitter's shares tanked today on this news. They're down more than 9%. And that suggests investors are worried that Musk is maybe having second thoughts about this deal.

CHANG: So why would he change his mind?

BOND: Well, look; this purchase is getting more expensive and risky. You know, Musk has committed to paying $21 billion out of this purchase price. He said he's going to do that by selling and borrowing against some of his shares in Tesla, the electric car company where he's CEO and the source of much of his wealth. But Tesla's stock price has dropped by almost a third since the Twitter deal was announced.

And on top of that, there has been this wider sell-off in the market that's hit tech stocks especially hard. Here's what Angelo Zino, an analyst at CFRA Research, told me.

ANGELO ZINO: With Tesla's stock kind of petering here in recent weeks, I think that's also had a impact on Musk's, you know, personal wealth. And, you know, the combination of the two, I think, would naturally kind of give an individual like Elon Musk cold feet.

CHANG: Cold feet - but can Musk just walk away from this deal easy peasy?

BOND: Well, he would have to pay a $1 billion breakup fee to Twitter with, you know, very few exceptions.


BOND: And experts tell me that even if he did that, he could still be sued for breach of contract, be on the hook for even more money. So some people think it's much more likely Musk may be using this issue as leverage to renegotiate his offer price, basically to pay less.

And this is not the way that big corporate deals typically play out. Here's what Donna Hitscherich, a professor at Columbia Business School, told me.

DONNA HITSCHERICH: Generally speaking, people don't sign merger agreements so they can walk away from them. They sign merger agreements so they can do deals. So I guess the question is, is this a bargaining issue, or is this really a do-or-die, I have to renegotiate the deal or I'm going to try to terminate the merger agreement?

BOND: Of course, though, this is Elon Musk we're talking about. You know, he often operates on gut instinct, so it's hard to say what he's going to do next.

CHANG: So fascinating. OK, so what impact is all of this having on Twitter, the company, at this point?

BOND: Well, it's adding to what's already a huge amount of uncertainty. You know, just yesterday, Twitter CEO Parag Agrawal announced a hiring freeze and spending cuts. He also said two top executives are leaving. That's adding to concerns that Musk's potential takeover is going to result in an exodus of employees. Meanwhile, this afternoon Agrawal tweeted he does expect the deal to close, but he says, quote, "we need to be prepared for all scenarios."

CHANG: That is NPR's Shannon Bond. Thank you, Shannon.

BOND: Thanks, Ailsa. Transcript provided by NPR, Copyright NPR.