Twitter shares have fallen sharply after reports that US authorities are looking into national security concerns over Elon Musk’s purchase of the social media company.
Twitter plunged 16% in New York’s pre-market trading after Bloomberg reported that Joe Biden administration officials are discussing the move.
The US government is concerned by the presence of foreign investors in Musk’s consortium. The $44 billion takeover involves Prince Alwaleed bin Talal from Saudi Arabia, China’s Binance, and Qatar’s sovereign wealth funds.
Musk’s Starlink satellite network could be investigated by authorities, amid concern about recent threats to cease supplying Ukraine with the service and a series of increasingly Russia-friendly tweets.
Shares in #Twitter have dropped sharply following reports #USA authorities are considering national security reviews into #ElonMusk's takeover of the social media company. The US government is concerned about the presence of foreign investors in Musk's consortium. pic.twitter.com/wyJ9YyBNHA
— Share_Talk ™ (@Share_Talk) October 21, 2022
According to documents obtained by The Washington Post, Elon Musk’s plans regarding Twitter Inc. include slashing its staff by almost 75% within a few months.
Musk’s $44 billion purchase would see Twitter’s staff shrink to less than 2,000, as compared to the 7,500 currently employed. The Post reported that Musk made these comments to potential investors. According to Bloomberg, Musk had stated to investors that he would reduce staff during his initial pitch to bankers to fund the social network.
Musk, a billionaire and chief executive officer at Tesla Inc., said earlier this month that he would continue with his agreement to make Twitter private. This ended a long court battle. According to the Post, even if Musk does not end up owning Twitter the company will need to reduce its workforce in order to cut costs.
