{"id":5420,"date":"2022-05-13T16:45:19","date_gmt":"2022-05-13T14:45:19","guid":{"rendered":"https:\/\/pr.gagadget.com\/elon-musk-twitter-deal-temporarily-on-hold-as-some-suggest-he-plans-to-take-the-money-and-run\/"},"modified":"2022-05-13T16:45:19","modified_gmt":"2022-05-13T14:45:19","slug":"elon-musk-twitter-deal-temporarily-on-hold-as-some-suggest-he-plans-to-take-the-money-and-run","status":"publish","type":"post","link":"https:\/\/pr.gagadget.com\/en\/elon-musk-twitter-deal-temporarily-on-hold-as-some-suggest-he-plans-to-take-the-money-and-run\/","title":{"rendered":"Elon Musk Twitter deal ‘temporarily on hold’ as some suggest he plans to take the money and run"},"content":{"rendered":"
Elon Musk Twitter deal ‘temporarily on hold’ as some suggest he plans to take the money and run<\/div>\n
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The Elon Musk Twitter deal is now ‘temporarily on hold,’ says the billionaire, in a tweet today. Twitter had told him that spam and fake accounts represent fewer than 5% of users, and Musk now says he wants to see the evidence for this. <\/p>\n

Musk continued with, “Still committed acquisition,” but others are suggesting this may not be the case. <\/p>\n

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Background<\/h2>\n

The Tesla and SpaceX CEO last month offered to buy Twitter outright at a price per share which valued the company at around $44B – a significant premium over its then-current value. This followed his quiet purchase<\/a> of almost 10% of the company. <\/p>\n

Twitter later announced that it would accept Musk’s offer of $54. 20 per share, inviting him to join the company’s board. The majority of reactions were less enthusiastic to the news, most fearing the vision of an entrepreneur that allows for unrestricted speech will lead to aggressive and loud voices dominating. It is also possible that disinformation could flourish even more. <\/p>\n

Elon Musk Twitter Deal on Hold <\/h2>\n

Musk has tweeted today’s update. <\/p>\n

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

— Elon Musk (@elonmusk) May 13, 2022<\/a><\/p>\n<\/blockquote>\n<\/div>\n<\/figure>\n

Three theories are now circulating about the reason behind the announcement. <\/p>\n

Theory 1: Musk can no longer afford the purchase<\/h2>\n

Vanity Fair<\/a><\/em> summarises a Hindenburg report<\/a> questioning the viability of the purchase plan. <\/p>\n

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Hindenburg Research published Monday’s report stating that Musk’s offer to buy out Twitter was not being accepted. It also questioned how Musk would finance the purchase. The report went on to question how Musk would finance the buyout, writing that “placing both Twitter (and ultimately Tesla’s) future on a foundation of further equity-backed margin loans, or potentially more sales of Tesla equity amidst a volatile market, adds risk to both enterprises.”<\/p>\n<\/blockquote>\n

Theory 2: Musk wants to renegotiate<\/h2>\n

Some are suggesting that this is simply paving the way to reduce his offer – possibly prompted by his co-investors, suggests Reuters<\/a>. <\/em><\/p>\n

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While Musk has said he does not care about the economics of buying Twitter, some investors think the 27% drop in Tesla shares since he revealed his stake is driven partly by concerns he may have to sell more shares. If Musk is able to negotiate a lower purchase price, Tesla stock will be less under pressure. If Musk becomes concerned about paying too much, some co-investors might encourage him to continue. <\/p>\n<\/blockquote>\n

Theory 3: Musk wants to take the money and run<\/h2>\n

Musk sold $8. 5B worth of Tesla shares to help fund the purchase, and a range of factors – some macroeconomic, some specific to Musk – saw the EV maker’s share price fall 27% since then. At today’s price, Musk could repurchase the shares for $6.2B. <\/p>\n

As things stand, he’s on the hook for a $1B penalty clause if he walks away from the deal – though would still make money. Some believe that he is making this claim to get around the penalty. <\/p>\n

The only certainty one can give is that we will have to wait and watch. Musk is not able to predict what the future holds, so it’s impossible to know what Musk intends. Many would suggest that this statement can be reduced to “No one knows what he will do .’<\/p>\n

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Photo: Jeremy Bezanger<\/a>\/Unsplash<\/a><\/em><\/p>\n

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