Twitter’s shares fell on reports that the Biden administration is looking into the security of Musk’s businesses


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Shares of Twitter fell as much as 8% in premarket trading on Friday as investors braced for last-minute uncertainty. Elon Musk’s $44 billion deal to buy the company.

Stocks rebounded slightly later in the morning, following Bloomberg reported that Biden administration officials are in early discussions to subject some of Musk’s companies to national security reviews, including the planned takeover of Twitter ( TWTR ). When asked by CNN, the administration pushed back on the report, citing people familiar with the matter.

“We are not aware of any such conversation,” National Security Council spokeswoman Adrienne Watson said in a statement. A Treasury spokeswoman said the Committee on Foreign Investment in the United States “does not comment publicly on transactions it does or does not review” in accordance with law and practice.

Equity investors who have pledged to provide financing to help Musk fund the deal include several foreign entities, including Qatar’s sovereign wealth fund and Saudi Arabia’s Prince Alwaleed bin Talal, who was one of Twitter’s biggest investors before Musk took over.

In response to a tweet about the Bloomberg report, one user wrote: “It would be hysterical if the government stopped overpaying Elon on Twitter.” Musk he answered Caption that tweet with a “100” emoji, usually indicating emphatic agreement, and a laughing face emoji.

It’s unclear what impact the reported security review might have on completing a deal that has already been plagued by months of uncertainty. Musk has a week to close the deal or face a rescheduled trial in Delaware’s Chancery Court, which could force him to acquire the social media company.

According to other accounts, the deal appears to be on its way to completion. In a separate report Thursday afternoon, Bloomberg said that bankers and lawyers for Twitter and Musk are preparing the necessary paperwork to complete the deal. Bloomberg also reported last week that the company had frozen employee stock accounts in an effort to complete the deal.

In a conference call to discuss Tesla’s earnings results this week, Musk said he was “happy” with the Twitter deal, but also admitted it is “overpaying.” “Twitter’s long-term potential, in my view, is an order of magnitude greater than its current value,” he said.

The Washington Post reported Thursday that Musk had told potential investors in the deal that he planned to lay off nearly 75 percent of the company’s workforce, and that Twitter already planned mass layoffs even if the deal did not go through, citing internal documents and interviews with people who know the subject. Neither Twitter nor Musk’s representatives responded to requests for comment about the release plans.

Musk had previously discussed dramatically cutting Twitter’s workforce in personal text messages with friends about the deal, which were revealed in court filings, and did not rule out the possibility of layoffs during a call with Twitter employees in June.

– CNN’s Matt Egan contributed to this report.