Twitter Stock Drops After Elon Musk Says Deal Is On Hold


Elon Musk has said his deal to buy Twitter is on hold, raising questions about the takeover.


Photo:

David Paul Morris/Bloomberg News

Twitter shares Inc.

TWTR -9.12%

fell during morning trading after Elon Musk said his deal to buy the social media company was on hold.

Twitter shares fell 10% to $40.43, on course to close at their lowest level since early April, just before Mr Musk disclosed a surprise 9% stake in the company.

Mr. Musk, the CEO of Tesla Inc..

TSLA 6.21%

, last month reached a deal to buy Twitter and take it private, ending an upside-down month for the social media company and its stock. But on Friday morning, he tweeted: “The Twitter agreement is temporarily suspended pending details supporting the calculation that spam/fake accounts indeed represent less than 5% of users. He linked to a May 2 Reuters report on a recent Twitter headlines filing with these statistics.

Later Friday morning, he added on Twitter that he was “still committed” to the acquisition. This helped Twitter pare its losses after falling more than 20% in the premarket session.

Still, Twitter shares are now trading around 25% below the $54.20 per share trading price. Shares of the company had already fallen recently, reflecting investor concerns over the deal’s prospects.

But Twitter, like many tech stocks, has also been hit hard lately by a broad market sell-off in riskier assets. Tesla shares were also pummeled. Still, Tesla shares jumped 4.7% on the news Friday.

Elon Musk has cultivated close ties with Beijing to expand Tesla’s business in China. Now that it is buying Twitter and focusing on free speech, the WSJ examines how China has used the social media platform to promote its views, and why that raises concerns. Photo illustration: Sharon Shi

Write to Caitlin McCabe at caitlin.mccabe@wsj.com

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