Twitter Inc.’s stock dropped on Friday after Elon Musk said he was putting the proposal to buy the social media company “temporarily on hold” as he conducts due diligence on false accounts.
TWTR, -2.19% fell 16.1% in premarket trading, putting it on track to open at its lowest price since March 25 during regular trading hours. That was before Musk revealed he had purchased a 9.2% stake in Twitter.
Musk, the “Technoking” and CEO of electric vehicle industry leader Tesla Inc. TSLA, -0.82%, announced the hold through Twitter:
Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of usershttps://t.co/Y2t0QMuuyn
— Elon Musk (@elonmusk) May 13, 2022
The tweet comes a day after Twitter announced the departure of two executives ahead of Musk’s takeover, as well as a halt to most hiring plans.
Musk revealed his Twitter holding on April 4 and then said on April 14 that he was making an unsolicited bid for the company. Musk agreed to buy Twitter for $54.20 per share on April 25.
The closest Twitter’s stock has been to closing at the $54.20 bid price since Musk initiated the bid on April 25, when it ended at $51.70.
The stock had plummeted 10.5% in a five-day losing skid prior to Thursday’s selloff.
Meanwhile, Tesla’s stock rose 5.6% in premarket trade, after declining since Musk revealed his Twitter holding, on fears that he would have to sell some Tesla stock to fund the buyout and that the agreement would distract him from running the EV maker.
Tesla’s stock had dropped 36.4% since Musk revealed his Twitter investment on April 4th.
Through Thursday, Twitter shares had gained 4.3% year to date, compared to 31.1% for Tesla and 17.5% for the S&P 500 index SPX, -0.13%.