Most multi-billion dollar business deals are not carried out in public on social media, but that’s how Elon Musk is handling his attempt to acquire Twitter. Weeks after tweeting his way to a preliminary agreement to buy the social media site for $44 billion, Musk is now casting doubt on the deal (via tweet), saying that he first needs to verify Twitter’s bot count is really as low as it claims.
The Twitter saga began last month When Musk revealed he had purchased a 9.2% stake in the company, making him the largest single shareholder (for a brief time). He also made his offer to purchase the rest of the company at a premium of $54.20 per share, amounting to $44 billion total. He also rejected a seat on the board, which would have limited how many shares he could own. Initially, Twitter seemed uninterested in the offer and even enacted measures to ensure Musk could not execute a hostile takeover by buying the majority of shares. Days later, Twitter accepted the bid, but it has not been smooth sailing.
As anyone who has been following the exploits of the world’s richest man can tell you, Elon Musk loves stirring the pot online. Tesla doesn’t even have a public relations department, preferring to allow Musk to disseminate information via Twitter, something that has gotten him in hot water in the past. For example, when Musk tweeted that he had secured funding to take Tesla private when, in fact, he did not have the necessary backing. That earned him a slap on the wrist from regulators.
Musk has regularly tweeted his thoughts on the Twitter deal and speculated about changes he would make to the service, including a scheme to verify all the real humans on the platform. This appears to be a sticking point for Musk. Twitter has estimated that about five percent of accounts on the site are bots, but it also admits that the number may be higher and it has no way of being certain.
20% fake/spam accounts, while 4 times what Twitter claims, could be *much* higher.
My offer was based on Twitter’s SEC filings being accurate.
Yesterday, Twitter’s CEO publicly refused to show proof of <5%.
This deal cannot move forward until he does.
— Elon Musk (@elonmusk) May 17, 2022
At a recent public appearance, Musk speculated that as much as 20 percent of Twitter’s users could be fake. He followed up with a tweet saying he was putting a hold on the deal until he could confirm the five percent figure, noting that his $44 billion offer was based on the company’s SEC filings.
Interestingly, the breakup fee Musk would pay if he walks away is only $1 billion, a small amount for such an enormous deal. Musk’s reluctance might have something to do with the performance of Tesla stock, which he used to secure part of the acquisition. Its value has dropped by about a third since the deal was announced. It’s currently unclear if Musk will pull out, but we expect we’ll hear a lot more about it on his Twitter page in either case.
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