Musk’s plans to buy Twitter have plagued policy makers around the world.
Joe Skipper | Reuters
Elon Musk cannot leave his deal to buy Twitter by paying the agreed $ 1 billion split fee. It’s not that simple.
Mask Friday, he Put Twitter acquisition “on hold” As the company has long argued, it’s investigating whether the amount of fake / spam accounts on Twitter is actually only 5%. He followed the tweet, reiterating that he was still working on an acquisition.
But he is at risk of proceedings from twitter Due to a breach of contract that could cost billions of dollars to the wealthiest people in the world.
The reasons for masks to put a deal on hold may be similar: he may want Twitter to lower its selling price. Twitter’s share price fell more than 8% on Friday, down about 23% from Musk’s agreed purchase price of $ 54.20 per share. Part of this decline is related to the overall downturn in tech stocks this month. Nasdaq has fallen another 11% since the market closed on April 25th. The day Twitter accepted the mask offer..
“This is probably a bargaining tactic on behalf of Elon,” said Bernstein’s senior research analyst Toni Sakonagi. CNBC’s “Squawk Box”.. “The market has fallen sharply. He’s probably using negotiating tactics in the guise of a true active user,” he said.
Mask may feel pressure or obligation to lower prices on other potential investors on Twitter, even if the wealthiest people in the world are less price-agnostic.
mask Under negotiation with external investors For both equity and preferential lending to reduce his personal investment in Twitter.If he can lower Twitter prices, external investor returns could be higher When Twitter is published Ownership or resale.
He said he’s still committed to buying Twitter, but Mask may want to throw a towel given his paper losses. Tesla Share ownership. Tesla’s share is down about 24% from last month.
If Tesla’s loss is related to Twitter’s acquisition and Musk believes it is potentially more important than both the $ 1 billion cancellation fee and the additional damages claimed in court if it loses. , He can be determined to make sense to leave.
But he also has to deal with the loss of reputation that accompanies the closing of a deal. It is unclear if future companies are at risk of selling to masks with that track record.
Mask couldn’t comment immediately.
As Tiffany and LVMH finally settled, Twitter may not have many good options other than renegotiating with musk. The company probably wants to avoid expensive and protracted proceedings. Employees may flee because the company has no clear plans for the future. Twitter is already cutting costs.. On Thursday it said it had dismissed two executives and put them on hold.
When Twitter agreed to sell itself to Mask for $ 54.20, the board didn’t bother to demand a higher price. Partly because there were no other buyers interested At that price. Twitter’s board has concluded that it is unlikely that it will soon return to high levels of trading, given the decline in valuations of peer stocks this year. Facebook When snap..
The best result of Twitter may be to accept lower offers from Mask.
A Twitter spokesperson couldn’t comment immediately.