Elon Musk’s pause on Twitter takeover triggers a flap

What is Elon Musk up to?

Not for the first time that’s the question on the minds of Twitter executives, global investors and many of his 92 million followers, after the world’s richest man announced, in a tweet, naturally, that his purchase of the social media platform is “temporarily on hold”.

The impact was instant, initially wiping 16% off the price of shares that three weeks ago he valued at $54.20 (£44.50) in a $44bn (£36.1bn) takeover.

The trigger appears to be a Reuters’ news story about a 10-day old Twitter announcement estimating the number of spam or false accounts at less than 5% of the platform’s 229 million users, but conceded the figure may not be accurate.

It is the sort of issue that might have been addressed in due diligence – the process by which buyers and their banks closely examine the company they are acquiring – had Musk not waived that step in order to hustle the Twitter board into a swift decision on his offer.

Musk has made war on the “spambots”, the automated accounts that thrive in Twitter’s swamp of anonymous abuse, a central plank of his manifesto alongside “free-speech fundamentalism”.

If there are fewer bots than previously thought perhaps there is less scope to quickly transform the user experience.

If there are more, that’s fewer real account holders from whom to raise revenue.

Equally, pressing pause might be a convenient excuse for the rockets-to-Roadsters billionaire to take stock after a fortnight of tech sell-offs on Wall Street.

While Netflix and others have suffered, Twitter drifted to almost 20% below Musk’s offer, suggesting the markets were losing confidence in a deal being done at that price.

For those wondering if he was overpaying it certainly looks like it now.

With his social media statements amplified by a vast and loyal investor following the Tesla boss is a habitual sower of chaos on markets, but wiping billions off the value of a target would be bold even by his standards.

Walking away from the deal would cost him $1bn (£820m).

So whether the pause is part of a considered play for time, or the product of twitchy fingers and a magpie mind, remains to be seen.

In a second Tweet, posted after two hours of wild speculation, he wrote: “Still committed to acquisition”.

It is unlikely to be the final word.