Elon Musk ‘still committed’ to Twitter deal after putting it on hold – business live

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Full story: Twitter takeover temporarily on hold, says Elon Musk

Dan Milmo

Dan Milmo

Elon Musk has said his $44bn takeover of Twitter is “temporarily on hold” after the social media platform claimed that less than 5% of its users were spam or fake accounts.

The Tesla chief tweeted on Friday morning that the deal was being frozen while he awaited details behind Twitter’s assertion.

Musk announced the move alongside a link to a Reuters article published on 2 May that referred to a filing with the US financial regulator, in which Twitter claimed that false or spam accounts represented less than 5% of its daily average users.

Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of usershttps://t.co/Y2t0QMuuyn

— Elon Musk (@elonmusk) May 13, 2022

n”,”url”:”https://twitter.com/elonmusk/status/1525049369552048129?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1525049369552048129%7Ctwgr%5E%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fwww.theguardian.com%2Ftechnology%2F2022%2Fmay%2F13%2Ftwitter-takeover-temporarily-hold-elon-musk”,”id”:”1525049369552048129″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”d8e48afa-45cf-420a-9da0-a46d55d0f4f7″}}”

Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of usershttps://t.co/Y2t0QMuuyn

— Elon Musk (@elonmusk) May 13, 2022

Musk has railed at automated Twitter accounts – which are not run manually – and said after announcing the takeover that he wanted to improve the platform by “authenticating all humans”. He has agreed to pay a $1bn break fee to Twitter if he walks away from the deal.

The news sent Twitter’s shares down about 23% in pre-market trading, on concerns that the deal could collapse.

The US stock markets is set to rally, after a very turbulent week that saw tech stocks tumble hard:

U.S. STOCK INDEX FUTURES EXTEND GAINS, NASDAQ FUTURES LAST UP 2%

— First Squawk (@FirstSquawk) May 13, 2022

n”,”url”:”https://twitter.com/FirstSquawk/status/1525089408478633985″,”id”:”1525089408478633985″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”f9124d3d-c352-4e63-bebd-c4a363681c4b”}}”

U.S. STOCK INDEX FUTURES EXTEND GAINS, NASDAQ FUTURES LAST UP 2%

— First Squawk (@FirstSquawk) May 13, 2022

Twitter’s share price has recovered some of its earlier losses.

It’s currently down around 11% in pre-market trading, at $40, having dropped as low as $34 when Musk said the deal was on hold, from $45 last night.

Twitter 👇 https://t.co/i9zwIsWyS9 pic.twitter.com/vWXI6a8MNV

— Jonathan Ferro (@FerroTV) May 13, 2022

n”,”url”:”https://twitter.com/FerroTV/status/1525081280030842880″,”id”:”1525081280030842880″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”6f21c0ab-39ac-4725-b95d-a4521e313301″}}”/

Of course, we’ve now got a good idea of what Twitter would be worth without Musk’s $54.20/share bid…

“Still committed to acquisition”

… but just out of curiosity let’s see where the stock would trade after the recent market selloff if I temporarily took my $54.20 offer off the table. https://t.co/w5kUMkinNJ

— Brian Chappatta (@BChappatta) May 13, 2022

n”,”url”:”https://twitter.com/BChappatta/status/1525083705546530817″,”id”:”1525083705546530817″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”d68b387f-f263-4a88-84e6-044c807d1bbe”}}”

“Still committed to acquisition”

… but just out of curiosity let’s see where the stock would trade after the recent market selloff if I temporarily took my $54.20 offer off the table. https://t.co/w5kUMkinNJ

— Brian Chappatta (@BChappatta) May 13, 2022

Musk: Still committed to acquisition

Elon Musk has now tweeted that he’s “Still committed” to the acquisition….

Still committed to acquisition

— Elon Musk (@elonmusk) May 13, 2022

n”,”url”:”https://twitter.com/elonmusk/status/1525080945274998785″,”id”:”1525080945274998785″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”edc8cc3a-4bd0-40ed-aae0-c546310a0826″}}”

Still committed to acquisition

— Elon Musk (@elonmusk) May 13, 2022

Full story: Twitter takeover temporarily on hold, says Elon Musk

Dan Milmo

Dan Milmo

Elon Musk has said his $44bn takeover of Twitter is “temporarily on hold” after the social media platform claimed that less than 5% of its users were spam or fake accounts.

The Tesla chief tweeted on Friday morning that the deal was being frozen while he awaited details behind Twitter’s assertion.

Musk announced the move alongside a link to a Reuters article published on 2 May that referred to a filing with the US financial regulator, in which Twitter claimed that false or spam accounts represented less than 5% of its daily average users.

Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of usershttps://t.co/Y2t0QMuuyn

— Elon Musk (@elonmusk) May 13, 2022

n”,”url”:”https://twitter.com/elonmusk/status/1525049369552048129?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1525049369552048129%7Ctwgr%5E%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fwww.theguardian.com%2Ftechnology%2F2022%2Fmay%2F13%2Ftwitter-takeover-temporarily-hold-elon-musk”,”id”:”1525049369552048129″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”f14e3792-cf69-48ae-a722-9b7eeb8445e6″}}”

Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of usershttps://t.co/Y2t0QMuuyn

— Elon Musk (@elonmusk) May 13, 2022

Musk has railed at automated Twitter accounts – which are not run manually – and said after announcing the takeover that he wanted to improve the platform by “authenticating all humans”. He has agreed to pay a $1bn break fee to Twitter if he walks away from the deal.

The news sent Twitter’s shares down about 23% in pre-market trading, on concerns that the deal could collapse.

More analysis from Wedbush’s Dan Ives:

The implications of this Musk tweet will send this Twitter circus show into a Friday the 13th horror show as now the Street will view this deal as 1) likely falling apart, 2) Musk negotiating for a lower deal price, or 3) Musk simply walking away with a $1 billion breakup fee

— Dan Ives (@DivesTech) May 13, 2022

n”,”url”:”https://twitter.com/DivesTech/status/1525073930129747968″,”id”:”1525073930129747968″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”cec8f307-5390-4228-ae37-6e342f8a44f1″}}”

The implications of this Musk tweet will send this Twitter circus show into a Friday the 13th horror show as now the Street will view this deal as 1) likely falling apart, 2) Musk negotiating for a lower deal price, or 3) Musk simply walking away with a $1 billion breakup fee

— Dan Ives (@DivesTech) May 13, 2022

In our opinion, with the nature of Tesla shares being used as leverage for Musk in the deal, the massive sell-off seen in Tesla and the overhang created by this deal has turned into a life of its own. The initial reaction will be positive for Tesla shares as a relief.

— Dan Ives (@DivesTech) May 13, 2022

n”,”url”:”https://twitter.com/DivesTech/status/1525074540568666112″,”id”:”1525074540568666112″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”23c62ac8-6100-48e1-a21d-2d9a4c6d0511″}}”

In our opinion, with the nature of Tesla shares being used as leverage for Musk in the deal, the massive sell-off seen in Tesla and the overhang created by this deal has turned into a life of its own. The initial reaction will be positive for Tesla shares as a relief.

— Dan Ives (@DivesTech) May 13, 2022

Under the deal, Elon Musk and Twitter each agreed to pay the other $1bn if their proposed merger falls apart because of the actions of either side.

Mirabaud: the Twitter tragi-comedy continues

The whole situation is ‘farcical’, and Twitter’s board must take some of the blame.

So explains Neil Campling, head of TMT research at Mirabaud Equity Research:

“The tragi-comedy continues and the Twitter situation is nothing short of laughable. We’d always said Musk may cut or run or change his tune at the 11th hour and 59 minutes and 59 seconds on the clock. We’re not even close to the 11th hour yet. Farcical.

Musk has never had the full funding – we know that from his constant attempts to get financial support – but he also held all the cards. The Twitter board have been held hostage and only have themselves to blame for this mess. No other buyer will emerge – if Musk decides he is still interested he can “name his price”… and it won’t be higher!

The board should have seen this coming. There was a specific performance clause in the merger agreement (section 9.9), which gave Twitter the right to “consummate the closing (of the deal)” but only if Musk had the financing – which, of course, he doesn’t.”

Elon Musk may be having second thoughts about the deal, says John Colley, Associate Dean at Warwick Business School:

‘Fake accounts’ were always a likely issue, but didn’t dissuade him from launching his bid. Bringing it up now may just be an excuse to withdraw gracefully.

“Maybe the true cost and extent of the risk involved in turning around a ‘break even’ Twitter may have dawned on Elon Musk. After all, $43Bn for what may be little more than a sideline does seem excessive. The collapse in Tesla’s shares following the original offer announcement underlines what the markets think.”

Musk’s move will be ‘highly…



Read More: Elon Musk ‘still committed’ to Twitter deal after putting it on hold – business live

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