Elon Musk has put his $44 billion (£35 billion) deal to buy Twitter on hold after raising concerns about the number of fake or spam accounts on the social media platform.
He stated that he was awaiting information “to support [the] calculation that spam/fake accounts do indeed represent less than 5% of users.”
Mr. Musk has been vocal about the need to clean up spam accounts.
Analysts speculated that he may be attempting to renegotiate the price or even walk away from the takeover.
Mr Musk later stated that he was “still committed to acquisition,” but the revelations fueled Wall Street scepticism, sending Twitter’s stock price plummeting.
In New York, shares were down 10% in early trading. Even before Mr Musk’s comments, the stock was trading for less than the $54.40 he had offered, indicating that the markets were not convinced he would complete the takeover.
If either Twitter or Mr Musk decides to leave, they must pay a $1 billion termination fee to the other party.
Twitter reported more than two weeks ago that fake accounts made up less than 5% of its daily active users in the first three months of this year.
However, the company said in determining the amount of spam accounts, “it applied significant judgment, so our estimation of false or spam accounts may not accurately represent the actual number of such accounts”.
“The actual number of false or spam accounts could be higher than we have estimated. We are continually seeking to improve our ability to estimate the total number of spam accounts,” it said.
Mr Musk, who is the richest person in the world according to Forbes magazine, is now examining that figure.