Elon Musk has a strong incentive to back out of buying Twitter. His plunging Tesla stock. Which would guarantee a loan for the purchase if he were to go through with it. The deal has taken a significant hit to Musk’s net worth.
Elon Musk is less than 50% likely to acquire Twitter for $44 billion, according to a Wedbush analyst. The billionaire may use the concern about bots as a reason to lower the price of his proposed buyout, $54.20 a share.
Elon Musk said a deal for Twitter is not “out of the question” at a lower price, according to Kevin Paffrath, a financial analyst who attended the All-In Summit in Miami.
Musk’s comments Monday signaled he was continuing to distance himself from his initial $44 billion deal to buy Twitter, which was announced on April 25.
Twitter shares fell sharply after Musk’s comments, closing at $37.39 on Monday – well below Musk’s offer of $54.20 per share. The deal had been expected to close later this year, but Musk said it was on hold pending details supporting Twitter’s calculation that spam accounts represent less than 5% of users. Many of Twitter’s own active users have agreed that a lot of the activity taking place by ‘follow’ accounts are actually that of Bots.
CEO of Twitter, Parag Agrawal, countered Elon’s statements on bots and said that the company is using a number of parameters, including device, and personal information to make a determination of an account is a real user or in fact a fake.
Twitter’s founder and former CEO, Jack Dorsey, cleared up much of the bot issue over the past few years
Analysts were doubting whether the $44 billion deal would get done in the first place based on Elon’s likely avenues to fund the transaction and the broad consensus that he was over paying for a company that has struggled for a long time to find positive earnings.
Twitter issued a new corporate filing late Monday that gave few answers, other than to say that business would continue as usual.
If the deal between Twitter and Musk doesn’t go through, Twitter will collect a $1 billion breakup fee, but the stock is still likely to plunge to below thirty per share.
For more on this story check out these sources:
- Elon Musk says he might try to renegotiate $44B Twitter deal for less The Washington Post
- Elon Musk is using a ‘dog ate the homework’ excuse to potentially back out of buying Twitter and there is now a less than 50% chance the deal gets done, Wedbush says Yahoo Finance
- Elon Musk sends poop emoji to Twitter CEO in response to thread on spam, fake accounts Fox Business
- Commentary: Here’s what Elon Musk buying Twitter tells us about the economy CNA
- Elon Musk and Jack Dorsey’s Mutual Admiration Hits a Bump in the Road TheStreet
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