Elon Musk Says His Takeover of Twitter Is ‘On Hold’


Credit…Dave Sanders for The New York Times

The sell-off on Wall Street cooled slightly in early trading on Friday, backing away from bear market territory, though stocks are still heading toward their sixth consecutive weekly decline.

Stock futures for the S&P 500 gained 1.5 percent, and Nasdaq futures were up 2 percent. Still, the S&P 500 is on track to continue its streak of losses as concerns over inflation and rising interest rates continue to weigh on investors.

Yields on government bonds, a proxy for investor expectations about interest rates, also rose on Friday.

The long stretch of declines have pushed the S&P 500 closer to a bear market, or a decline of 20 percent or more from recent highs. Through Thursday, the index was down 18 percent from its Jan. 3 peak. That type of drop signals that investors have turned more pessimistic about the stock market and the overall economic outlook. The Nasdaq composite fell into bear market territory in early March and is now 29 percent lower than its November high.

Wall Street’s slump partly reflects growing concerns over the consequences of rising interest rates. The Federal Reserve began raising rates in March, and as inflation keeps running at a rapid pace — with the latest report showing that inflation increased 8.3 percent through April — officials say they may have to take more drastic measures that could cause “some pain.” But economists are worried that the policy move could slow down the economy because consumer and corporate spending could ebb if borrowing becomes more expensive.

Concerns over inflation are also being exacerbated by the war in Ukraine and by Covid-19 lockdowns in China. Oil prices remain volatile amid changing prospects of energy demand.

West Texas Intermediate, the U.S. benchmark crude, was up 2.1 percent to $108.38 a barrel on Friday. Brent crude, the international standard, rose 2 percent to $109.67 a barrel.

In Europe, stock indexes edged higher, with the Stoxx Europe 600 up 1.5 percent.

The recent slide in stocks has the S&P 500 approaching a bear market, Wall Street’s label for a sustained downturn in the markets that reflects serious pessimism about the outlook for the economy.

Stocks will enter a bear market, at least by most conventional definitions, when the S&P 500 has dropped 20 percent from its last peak. Through the end of trading Thursday, the index had dropped more than 18 percent from a Jan. 3 record.

The Nasdaq composite, a benchmark that’s heavily weighted toward technology stocks, is already in bear market territory — having ended Thursday down 29 percent from its mid-November record.

The declines have come as investors grapple with the combination of the Russian invasion of Ukraine, which resulted in sanctions that severely limited gas supplies; global supply chain problems as the coronavirus pandemic grinds on; and an inflation problem that is prompting the Federal Reserve and other central banks to raise interest rates quickly.

The “headwinds” will “drag the S&P 500 into a bear market,” said Victoria Greene, chief investment officer at G Squared Private Wealth, an advisory firm. “We still have some structural problems — hawkish Fed, Ukraine, commodity price pressure, Covid shutdowns in China, inflation — that are pressuring growth expectations.”

The 20 percent trigger for a bear market — like the 10 percent trigger for what investors call a “correction” — are somewhat arbitrary thresholds. But they serve as mile markers to show that investors have turned pointedly more pessimistic about the market.

There is skepticism about the use of the terms correction and bear market, whose precise definitions have only been in use since the 1980s. Corrections are not uncommon, with the last one having started in January of this year, one of nearly a dozen since 2000.

Some corrections don’t last very long, like one in early 2018, which lasted less than two weeks. In some instances, stocks regained their previous peaks in a few months.


Credit…Jim Watson/Agence France-Presse — Getty Images

On April 4, Elon Musk revealed that he had purchased a sizable stake in Twitter. Three weeks later, Mr. Musk and Twitter reached a deal for the billionaire to acquire the social media company entirely and take it private. But now Mr. Musk says his bid is “temporarily on hold” until he can get more details to confirm that spam and fake accounts represent less than 5 percent of the social network’s total users.

Here are highlights of our coverage of the twists and turns in this saga:

Elon Musk Becomes Twitter’s Largest Shareholder (April 4): The Tesla chief executive, who has been critical of Twitter’s content moderation policies, has bought 9.2 percent of the social media company.

Elon Musk Joins Twitter’s Board, Pitching Ideas Big and Small (April 5): Free speech, open-source algorithms — and an edit button: The world’s richest person will soon help steer the social media platform where he has a huge following.

Elon Musk Will Not Join Twitter’s Board, Company Says (April 10): The announcement reverses a decision made days earlier. By not joining Twitter’s board, Mr. Musk will also no longer be bound by a previous agreement he had signed with the company.

Elon Musk, After Toying With Twitter, Now Wants It All (April 14): The billionaire executive recently became one of the company’s largest shareholders. Now he says he wants to buy the whole thing and change how it handles speech.

Twitter Counters a Musk Takeover With a Time-Tested Barrier (April 15): With a “poison pill” defense, Twitter seems intent on fending off the billionaire’s bid to buy it.

Elon Musk Races to Secure Financing for Twitter Bid (April 19): Mr. Musk is trying to shore up debt financing, including potentially taking out a loan against his shares of Tesla.

Elon Musk Details Plan for $46.5 Billion Twitter Takeover (April 21): The financial commitments from a group of banks put pressure on the social media company’s board to take his advances seriously.

Twitter in Advanced Talks to Sell Itself to Elon Musk (April 24): The company’s 11-member board held negotiations with Mr. Musk over his offer to buy the social networking service.


Elon Musk to Buy Twitter (April 25): The Tesla chief executive struck a deal to buy the site for roughly $44 billion. Here is how we covered the news in real time on the day Mr. Musk and Twitter announced their agreement.

Elon Musk Has Brought In New Investors to Fund His Twitter Deal, a Filing Shows (May 5): Mr. Musk revealed that he had raised around $7 billion from 18 entities to help fund his bid. The investors were a mix of Mr. Musk’s Silicon Valley friends as well as cryptocurrency companies, family offices, sovereign wealth funds, property firms and mutual-fund companies.

Elon Musk Says He Would ‘Reverse the Permanent Ban’ of Donald Trump on Twitter (May 10): Mr. Musk has said he wants Twitter to be a forum for debate, and he called the barring of Mr. Trump “morally wrong.” The former president has said he would not rejoin the platform.

Elon Musk Says His Takeover of Twitter Is ‘On Hold’ (May 13): Mr. Musk announced in a tweet that he wanted more details to confirm that spam and fake accounts represent less than 5 percent of the social network’s total users. About two hours later, Musk tweeted that he was still “committed” to the acquisition.


Credit…Win Mcnamee/Getty Images

Jerome H. Powell, the chair of the Federal Reserve, said the central bank has both the tools and resolve to bring down rapid inflation — though he acknowledged that the path to lower price increases could be a painful one.

“The process of getting inflation down to 2 percent will also include some pain, but ultimately the most painful thing would be if we were to fail to deal with it and inflation were to get entrenched,” Mr. Powell said, speaking during an interview with Marketplace on Thursday.

Mr. Powell was confirmed to a second four-year term at the head of the Fed on Thursday afternoon. He and his colleagues are facing down a challenging situation: While the economy is strong and jobs are plentiful, inflation is running at nearly the fastest pace in four decades. The central bank is tasked with fostering full employment and price stability, so it is in charge of slowing it down.

Consumer prices climbed 8.3 percent in April from the prior year, and while inflation eased somewhat on an annual basis, the details of the report suggested that price pressures continue to run hot.

The Fed has already begun raising interest rates to try and cool the economy, including making its largest increase since 2000 earlier this month. Mr. Powell and his colleagues have signaled that they will continue to push up borrowing costs as they attempt to restrain spending and hiring, hoping to bring demand and supply into balance and drive inflation lower.

While the Fed chair seemed to rule out a large 0.75 percent rate increase for the time being during a news conference last week — saying such a big move was not currently under consideration — he made clear that it could be appropriate if the economy surprises officials in a negative way.

“If things come in better than we expect, then we’re prepared to do less,” Mr. Powell said. “If they come in worse than when we expect, then we’re prepared to do more.”

The looming question for the Fed is whether they will be able to slow the economy enough to temper inflation without spurring a recession — something Mr. Powell and his colleagues have repeatedly acknowledged is likely to be a challenge.

“There are huge events, geopolitical events going on around the world, that are going to play a very important role in the economy in the next year or so,” Mr. Powell said on Thursday. “So the question whether we can execute a soft landing or not, it may actually depend on factors that we don’t control.”

The crypto world went into a full meltdown this week in a sell-off that graphically illustrated the risks of the experimental and unregulated digital currencies.

The moment of panic amounted to the worst reset in cryptocurrencies since Bitcoin plummeted 80 percent in 2018, David Yaffe-Bellany, Erin Griffith and Ephrat Livni report for The New York Times. But this time, the falling prices have broader impact because more people and institutions hold the currencies. Critics said the collapse was long overdue, while some traders compared the alarm and fear to the start of the 2008 financial crisis.

“This is like the perfect storm,” said Dan Dolev, an analyst who covers crypto companies and financial technology at the Mizuho Group.

The fall in cryptocurrencies is part of a broader pullback from risky assets, spurred by rising interest rates, inflation and economic uncertainty caused by Russia’s invasion of Ukraine. Those factors have compounded a so-called pandemic hangover that began as life started returning to normal in the United States, hurting the stock prices of companies like Zoom and Netflix that thrived during lockdowns.

But crypto’s decline is more severe than the broader plunge in the stock market. While the S&P 500 is down 18 percent so far this year, Bitcoin’s price has dropped 40 percent in the same period. In the last five days alone, Bitcoin has tumbled 20 percent, compared to a 5 percent decline in the S&P 500.

Cryptocurrency prices reached a peak late last year and have since slid as fears over the economy grew. But the meltdown gathered momentum this week when TerraUSD, a stablecoin, imploded. Stablecoins, which are meant to be a more reliable means of exchange, are typically pegged to a stable asset such as the U.S. dollar and are intended not to fluctuate in value. Many traders use them to buy other cryptocurrencies.

TerraUSD had the backing of credible venture capital firm. But TerraUSD was not backed by cash, treasuries or other traditional assets. Instead, it derived its supposed stability from algorithms that linked its value to a sister cryptocurrency called Luna.

This week, Luna lost almost its entire value. That immediately had a knock-on effect on TerraUSD, which fell to a low of 23 cents on Wednesday. As investors panicked, Tether, the most popular stablecoin and a linchpin of crypto trading, also wavered from its own $1 peg. Tether fell as low as $0.95 before recovering.