What is up with Elon Musk’s difficulty buying Twitter? Was he trying to bring down its price? He certainly accomplished that, intentional or not. Of course, there is the effect on his Tesla market shares to consider. Musk claims he will keep his agreement with the Twitter people at the agreed price of $54.20 per share which is enough to keep Twitter in the deal with Musk.
The richest man on Earth said bots were responsible for a minimum of all the site’s users. However, they only made up five percent of its monetized users in the last three months, according to CNBC.
The company’s deal was on hold until Twitter’s co-founder Jack Dorsey, who tends to give away his vast fortune according to The Forbes Magazine, proved the bot numbers were only five percent:
‘Musk on Monday estimated that fake users make up at least 20% of all users. Twitter, meanwhile, has said the accounts made up fewer than 5% of its monetizable daily active users in the past quarter.’
You see, Tesla shares are a great percentage of the car’s inventor’s wealth, which plummeted over 30 percent on the news of Musk’s bid for Twitter. That might be the reason he is waffling now. Tesla’s owner dropped $57 billion from his $213 billion total wealth number after announcing he was buying Twitter.
If Tesla decides to leave the deal, it would cost him one billion dollars termination fee, but that is not much given how much he has.
Tesla’s stock has been on an up-down ride given the number of recalls plaguing Musk ever since the car went on the market. Managing Director of Wedbush Securities Dan Ives said:
‘The stark reality for Twitter is that no other strategic/financial bidder will come near this deal and Musk knows that.’
The car company’s top executive’s had tweeted that Musk might renege on the final numbers, trying to “renegotiate a lower price:”
‘The Tesla chief executive’s tweet comes a day after he said he might try to renegotiate a lower price and accused Twitter of potentially misleading him about the number of bots on the platform — a clear signal he could seek to exit the deal.’
Twitter has stuck with that five percent per bot cost. However, the organization also said:
‘[I]n securities filings that the true number “could be higher.’
Should that number of bots be higher and Musk can prove he had been misled about the numbers, he could be released from the deal:
‘At a conference in Miami on Monday, Musk said a lower price was not “out of the question,” an indication that he may be distancing himself from the $44 billion offer announced April 25.’
Twitter’s numbers have finished stabilizing, and it “issued a proxy statement” reading:
‘If the merger is not completed, and depending on the circumstances that cause the merger not to be completed, the price of our common stock may decline significantly.’
Regarding Twitter’s methodology, CEO Parag Agrawal said Twitter had a hiring freeze and canned his top executives “of revenue and consumer product:”
‘And, of course, we are in the middle of an acquisition and we don’t yet know the timing of the close. In order to responsibly manage the organization as we sharpen our roadmaps and our work, we need to continue to be intentional about our teams, hiring and costs.’
At a conference on Monday, Musk said:
‘It’s a material adverse misstatement if they, in fact, have been vociferously claiming less than 5 percent of fake or spam accounts but in fact it is four or five times that number. This is a big deal.’
Feature image is a screenshot via YouTube.
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