Shares of Twitter Inc. tumbled Friday, after Elon Musk said he was putting the deal to buy the social-media company “temporarily on hold” while he does his due diligence on fake accounts.
dropped 16.1% in premarket trading, putting them on track to open at the lowest price seen during regular-session hours since March 25. That was before Musk first disclosed he took a 9.2% stake in Twitter.
Musk, who is the “Technoking” and chief executive of electric vehicle market leader Tesla Inc.
announced the hold through a tweet:
The tweet comes a day after Twitter said two executives were leaving the company ahead of the Musk buyout, and said it planned to pause most hiring plans.
Musk first disclosed his stake in Twitter on April 4, then said on April 14 that he was launching an unsolicited bid for the company. On April 25, Twitter agreed to be acquired by Musk for $54.20 a share.
But since Musk launched the bid, the closest Twitter’s stock came to closing at the $54.20 bid price was April 25, when it closed at $51.70.
Prior to Thursday’s selloff, the stock had dropped 10.5% amid a five-day losing streak.
Meanwhile, Musk’s tweet sent Tesla’s stock surging 5.6% in premarket trading, as the stock has been falling since Musk disclosed his Twitter stake, amid concerns that he would have to sell some Tesla stock to fund the buyout and worries that the deal would distract him from running the EV maker.
Since April 4, when Musk disclosed his Twitter stake, Tesla’s stock had plunged 36.4% through Thursday.
Year to date, Twitter shares have gained 4.3% through Thursday, while Tesla’s stock has shed 31.1% and the S&P 500 index
has dropped 17.5%.