Let’s see if I’ve got the story straight — in late April, Elon Musk signed a contract to buy Twitter for $54.20 per share. He offered to pay $43 billion for it. Musk thought he could make Twitter more profitable than it is. He also called himself a “free speech absolutist” and dropped big hints that he wouldn’t censor anybody or block accounts because they wrote outrageous things, which made Musk a hero on the Right.
Most people thought Musk was nuts and that he’d be better off putting his money into more charging stations for his electric cars. Most people thought that attempting to run an uncensored Twitter would be a galaxy-class headache. There was also much weeping and wailing over the possible death of Twitter as a reasonably useful social media platform, because Musk was expected to screw it up.
Since April the deal has been off again, on again. I confess I haven’t followed the saga that closely and don’t know what all the problems were; nor do I care.
Now Elon Musk has decided he does not want to buy Twitter. Part of the reason for that may be that tech stocks, including Twitter stock, have dropped like a rock since April. Twitter stock as I write this is $36.81. But Musk is still locked into that $54.20 share price. Not a good deal.
Musk is making noise about Twitter misleading him about how many Twitter users are actually bots. Some observers think this is just an issue Musk is trying to use to break the contract. Twitter is determined to make Musk stick to the contract.
Musk started searching for ways to not buy Twitter at $54.20 per share. His fundamental problem was that he had signed a contract to buy Twitter for that amount, and that contract, according to most qualified people who looked at it, gave him almost no wiggle room to exit the deal before closing. Absent proof that Twitter had misled him in a major way—one that had a “material adverse effect” on the company’s value, a high standard to meet—he would need to pay a $1 billion breakup fee to walk away. And even that might not do it, as the contract established that Twitter could take Musk to court and try to get a judge’s order to make him pay every red cent of his $44 billion bid.
Musk had his answer: He did not want to buy Twitter for what he agreed. But he needed a question that could make that answer work in public and in court, and his lawyers settled on, “Hey, Twitter. How many fake accounts do you really have?” Twitter has estimated that less than 5 percent of its users are fake accounts or bots. The company has been transparent (including, recently, CEO Parag Agrawal doing a big thread about it) that the 5-ish percent figure is just its best estimate. Musk has kept raising the subject. In June, Twitter gave Musk a big ol’ chunk of tweet data, nominally so he could do his own investigating but really so that he’d have less of an opening to claim, in service of nuking the deal, that Twitter was withholding crucial information. And you will never believe this, but it is now July, and Elon Musk’s camp is still claiming that Twitter has not gone along with his fact-finding mission about spam.
Sounds about right. And Musk will probably spend a ton of money on lawyers before he finally bites the bullet and pays the $1 billion to Twitter.
And now Trump has turned on Musk, calling him a bullshit artist. I can’t tell if this is because Musk not buying Twitter after all or because he said publicly recently that he never voted for a Republican. Trump had believed Musk was one of his voters. So I guess Musk isn’t the sweetheart of the MAGA crowd any more.
Oh, the buyer's remorse. Unfortunately, Musk probably thought the price was right at the time he made his offer, He may have guessed wrong, thinking others might want in, but no one was making a better or alternative offer, so Twitter accepted his. Offer…Acceptance…Something of Value…you have a contact.
Twitter, like many stocks in the Trump era had acquired speculative value. Some had little if any value other than speculative value. Elon's timing was bad. Trump's fantasy world was breaking down. Money supply was getting tighter. Wise investors knew which stocks had speculative value and about how much. Many did not. The price was determined by a "free" market, though was there any scale that Trump and company did not have a thumb or two upon?
The saga will go on and rich people justice will happen given Muck and Twitter can't find an agreement.
The Trump angle is odd, and news to me. The old pot calling the young kettle black as generations past might say. Both seem to have sanity problems they deny having, though Musk has claimed autistic spectrum disorder issues on SNL. One thing is for sure, Musk seems to never sleep. He is on Twitter almost 24/7, enough for Jim Kramer of CNBC business channel, another notorious non-sleeper to remark repeatedly on the subject. One can speculate on that symptom's cause, but professional help seems affordable at both their income levels if they opt for it.
I assume Trump jumped in as a distraction and to grab a patch of Musks spotlight. Both are attention hogs IMO.
As a personal disclaimer, I invest in none of these above-mentioned entities and have no intention of doing so.
Stay tuned, this story might have more legs than a Jonny Depp trial.
"Poor, poor" Elon Musk.
Your vanity trumped your ability to think rationally.
Again.
You, like lesser millions of moronic tRUMPanistas, thought he was speaking FOR you, while he was speaking TO you.
But in reality, he was telling you what you wanted to hear.
All be cared about was much money he could squeeze out of you willingly – almost gratefully, even – of every penny you have!
Imo: I don't want you buying Twitter, Elon.
You are one of a handful of Fascist Bazillionaires who'd take Twittert over, amd make it worse.
Much worse.
Again, this is my opinion.
But that, Medicare, Medicaid, SS(DS), and my ability to vote, are all that's left to me – a Boomer, as a legacy.
Where has the progress gone? What happened to empathy?
People like the Kochs, like Bezos, and people like you, Elon, have fattened your wealth by stealing America's future.
So F-U, Elon!
Just F-U.
You can go away now.
I was irked when Musk put a plant in TX to build Tesla. So much for any interest in owning one of Musk's electric cars. I think Musk thought the teaser about letting Trump out of the Twitter cage would drive interest (and rage) up. Too many people (including me) pay attention to what makes Trump flinch.
Keep in mind Musk has gotten in trouble with FTC (Securities fraud re Tweets) – essentially market manipulation. Musk may have expected to drive the price UP while he had a lock at $54. The stock went the other way and Musk will get his clock cleaned if he closes the deal (or pay a billion to walk away – maybe more.)
Yeah, Musk said (essentially) he didn't vote for Trump (piss off Trumpsters) but now he's rejecting Democrats (piss off the left who buys electric cars.) Now he's walking away from the deal Trumpsters thought would free Trump. So the Twitter ban on Trump holds but now it's Musks' fault. And Trump is going against Musk.
is there anyone Musk hasn't offended in a deal that getting Musk nothing but costing him a billion+ to prove what an idiot he is.
Pardon me for laughing.
I’m thoroughly enjoying practicing ambivalence, when I’m right
(1) 53. Ambivalence – Word of the Day – Learn with Cindy – Bing video
To me, Elon Musk is simply copying donnie's "Steal the Vote" campaign practice, which seemed to work, in spades (250 million at least), for donnie. Punishing Elon might show us the way to punish donnie for his lies.
Gotta love the irony of Trump calling Musk a "bullshit artist".
Econ note: yes, the "value" of Twitter is almost entirely "speculative" ( = imaginary). They prolly have way less that $1B in hard assets (servers storing & moving Bits). The imagined "value" which has inflated the stock prices of so many Social Media Corps is…
1. speculation on how much crap can be sold to the people whose eyeballs are glued to it ( = Number-of-Users x Average-Gullibility )
2. a side-effect of too much Big Money chasing too few options for highly profitable investments in actual productive physical plant (running a business that actually makes Things is hard)
All high-end assets (Stocks, Real Estate, Famous Art, etc) have inflated drastically since we (USA) bailed out Wall Street after the 2007 crash by giving/lending them TRILLIONS of $ (Fed QE). That is now trickling down to us Regular Folks, largely through Housing inflation, as Hedge Fund Vulture Capitalists have been buying up single-family houses (and more recently FARMLAND) and renting it back to people at monthly rates higher than the mortgages people once paid for the same place.
Over-valuation of Social Media Corps is another side-effect of this inflation in high-end assets.