Elon Musk said on Friday that his $44 billion acquisition of Twitter is “temporarily on hold,” a new twist in the face of rumors of internal friction around the deal.
Twitter’s stock has plunged about 20% in early morning trading hours as a result of Musk’s statement. Tesla’s stock has surged by 5%.
Musk agreed to pay $54.20 a share for Twitter, but the stock is currently trading at a much lower price.
Twitter Fake Accounts
Elon Musk said that his planned acquisition of Twitter had been postponed due to concerns over bogus accounts, a stunning change of events that stunned investors and cast doubt on his resolve to see the deal through.
Breakup Fee of $1 Billion
Musk, however, cannot just walk away from his commitment to buy the app since he is forced to pay a $1 billion breakup fee. The situation is significantly more convoluted.
When an external reason, such as regulatory intermediation or third-party financing issues, stops a transaction from concluding, a reverse breakup fee is imposed.
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