San Francisco: Elon musk threatened to walk away from its $44 billion bid to buy on Monday TwitterThe latest sign is that his plans to overhaul the social media platform may indeed be going awry.
for lawyers Tesla And SpaceX CEO threatened Twitter in a letter accusing the company of refusing to provide information about “spam bot” accounts. Such bots have become a major public engagement for the volatile billionaire, despite the fact that he declined the opportunity to check Twitter’s internal data a few months ago.
did Elon Musk Buy Twitter?
Not now. In April, Musk signed a deal with Twitter to buy the company for $44 billion and take it private. But the deal hasn’t closed. And as the weeks went by, Musk showed signs of unease with it, suggesting that he might want to negotiate a cheaper price or even walk away altogether.
Are Musk’s feet getting cold?
There could be a number of reasons why Musk has lost the luster of the Twitter deal since signing it in April. Twitter is firm on Musk’s agreed-upon price of $54.20 per share — but since early May, the stock has fallen more than 25% from that figure. The difference between the deal price and the actual share price suggests that many investors do not think the deal will work.
Musk’s initial $46 billion plan to finance the stock used in his electric vehicle company Tesla as collateral for the loan he would use to buy Twitter shares in the deal. He has since adjusted the plan to include more investors, including those with Twitter shares. But it is not clear who those investors might be.
Tesla’s share price has also fallen dramatically since April 4, the day Musk revealed that he was Twitter’s largest stakeholder. Its 35% drop has cut deep into Musk’s wealth, even though he remains the world’s richest man. The falling price of Tesla’s stock also reduces the amount Musk can borrow against his Tesla holdings. Company rules limit Musk to borrowing no more than 25% of the value of his Tesla stake, meaning Musk can now raise about $13.5 billion against his shares. This figure does not include stock options Musk has exercised or debts he may have repaid.
According to FactSet, Musk now owns about 163 million Tesla shares worth $114.7 billion.
Can Musk pull the whole thing off?
Experts say Musk can’t put the unilateral deal on hold, though that hasn’t stopped him from acting like he can. If he walks away, he could be on the hook for a $1 billion breakup charge. Twitter could also sue them for forcing them to complete the acquisition on agreed terms.
The Twitter sale agreement allows Musk to exit the deal if Twitter causes a “material adverse effect,” which is defined as a change that negatively affects Twitter’s business or financial conditions. . That’s why Musk is focusing on the spam bot problem — although he waived many of his rights under Twitter’s hood when he signed the deal.
What are spam bots again?
Bots are basically programs that post automated tweets, either for information – such as the US government’s “Quakebot”, which tweets details of seismic events – or for entertainment. However, Musk has focused his anger on “spam bots” used to blast sales pitches or increase the influence of a person or cause.
The problem is highly visible to Musk, one of Twitter’s most active celebrity users, whose name and likeness are often duplicated by fake accounts promoting cryptocurrency scams. Musk says it’s also a problem for advertisers who take out ads based on how many real people they expect to reach.
So now such bots – and the way Twitter counts them – have become a moot point in the deal. Twitter has long disclosed that it has a “number of false or spam accounts,” but is estimated to contain less than 5% of their more than 200 million daily active users.
Musk insisted the company was undermining them and demanded that Twitter turn over its internal data to investigate. It is unclear whether he can legally demand such information after denying his right to perform “due diligence” on Twitter’s internal accounting and operations. Some experts say the court will have to decide.
for lawyers Tesla And SpaceX CEO threatened Twitter in a letter accusing the company of refusing to provide information about “spam bot” accounts. Such bots have become a major public engagement for the volatile billionaire, despite the fact that he declined the opportunity to check Twitter’s internal data a few months ago.
did Elon Musk Buy Twitter?
Not now. In April, Musk signed a deal with Twitter to buy the company for $44 billion and take it private. But the deal hasn’t closed. And as the weeks went by, Musk showed signs of unease with it, suggesting that he might want to negotiate a cheaper price or even walk away altogether.
Are Musk’s feet getting cold?
There could be a number of reasons why Musk has lost the luster of the Twitter deal since signing it in April. Twitter is firm on Musk’s agreed-upon price of $54.20 per share — but since early May, the stock has fallen more than 25% from that figure. The difference between the deal price and the actual share price suggests that many investors do not think the deal will work.
Musk’s initial $46 billion plan to finance the stock used in his electric vehicle company Tesla as collateral for the loan he would use to buy Twitter shares in the deal. He has since adjusted the plan to include more investors, including those with Twitter shares. But it is not clear who those investors might be.
Tesla’s share price has also fallen dramatically since April 4, the day Musk revealed that he was Twitter’s largest stakeholder. Its 35% drop has cut deep into Musk’s wealth, even though he remains the world’s richest man. The falling price of Tesla’s stock also reduces the amount Musk can borrow against his Tesla holdings. Company rules limit Musk to borrowing no more than 25% of the value of his Tesla stake, meaning Musk can now raise about $13.5 billion against his shares. This figure does not include stock options Musk has exercised or debts he may have repaid.
According to FactSet, Musk now owns about 163 million Tesla shares worth $114.7 billion.
Can Musk pull the whole thing off?
Experts say Musk can’t put the unilateral deal on hold, though that hasn’t stopped him from acting like he can. If he walks away, he could be on the hook for a $1 billion breakup charge. Twitter could also sue them for forcing them to complete the acquisition on agreed terms.
The Twitter sale agreement allows Musk to exit the deal if Twitter causes a “material adverse effect,” which is defined as a change that negatively affects Twitter’s business or financial conditions. . That’s why Musk is focusing on the spam bot problem — although he waived many of his rights under Twitter’s hood when he signed the deal.
What are spam bots again?
Bots are basically programs that post automated tweets, either for information – such as the US government’s “Quakebot”, which tweets details of seismic events – or for entertainment. However, Musk has focused his anger on “spam bots” used to blast sales pitches or increase the influence of a person or cause.
The problem is highly visible to Musk, one of Twitter’s most active celebrity users, whose name and likeness are often duplicated by fake accounts promoting cryptocurrency scams. Musk says it’s also a problem for advertisers who take out ads based on how many real people they expect to reach.
So now such bots – and the way Twitter counts them – have become a moot point in the deal. Twitter has long disclosed that it has a “number of false or spam accounts,” but is estimated to contain less than 5% of their more than 200 million daily active users.
Musk insisted the company was undermining them and demanded that Twitter turn over its internal data to investigate. It is unclear whether he can legally demand such information after denying his right to perform “due diligence” on Twitter’s internal accounting and operations. Some experts say the court will have to decide.