On Friday, Elon Musk announced that the $44 billion deal to acquire Twitter is on hold until he receives more information about how many fake accounts exist on the social media platform.

Driving the news: “Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users,” Musk said via Twitter.

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  • According to CNN, his statement tanked Twitter shares by 20% in pre-market trading.
  • Two hours later, Musk followed up by saying that he is “still committed to acquisition.” This helped the shares experience rebound a bit.
  • Musk also tweeted out a Reuters report that indicated less than 5% of users on the platform are spam or fake accounts. He now wants the company to confirm this. Spam bots can artificially boost activity on Twitter, making it seem more popular than it actually is.
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What experts are saying: “This 5% metric has been out for some time. He clearly would have already seen it ... So it may well be more part of the strategy to lower the price,” said Susannah Streeter, an analyst at Hargreaves Lansdown, per another Reuters report.

State of play: Currently, the company’s market value is close to $9 billion below the offer price, according to CNBC News.

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  • If the deal doesn’t go through, Musk will have to pay a $1 billion breakup fee.

The bigger picture: When a company is in the process of being acquired, the buyers typically conduct due diligence, where the company's finances and proprietary information are reviewed before the deal closes.

  • “Usually we’d see some sort of filing that would come first, an amendment to previous filings on the deal, that says, ‘we’ve uncovered some information in the process of due diligence and we’re reconsidering our acquisition,’” said Josh White, an assistant professor of finance at Vanderbilt University and a former financial economist for the SEC, according to CNN.
  • “This happens as you get access to the books and access to proprietary information. What doesn’t normally happen is a tweet,” White said.

Flashback: Musk’s announcement comes a day after two of Twitter’s execs were pushed out while the company paused hiring.