Elon Musk won’t buy Twitter? Behind the scenes. | News

On Friday Financial markets hit the news that Elon Musk abandons the idea of ​​buying Twitter (TWTR.US). The question of whether this is his final decision or just a game of lowering the transaction price remains open, at least for the time being. To give investors an idea of ​​what might happen next, it’s worth looking at one of the most publicized transactions in recent months.

It all started harmlessly …

Elon Twitter “Musk

April 4 this year foreign investors rushed in euphoria on Twitter shares, which in the pre-sale market grew by almost 28%. The reason for this was the information about the purchase of a significant stake in the company by the eccentric billionaire Elon Musk, by some also referred to as a visionary. After the deal, Musk owned 9.2% of the company’s shares, which was four times the 2.25% owned by Twitter founders, according to Bloomberg Jack Dorsey held. At the time, Musk’s Twitter participation was worth $ 2.89 billion. The market speculated that the deal could only be a prelude to taking over the entire platform. As it turned out later, he was right.

There was only one, but “…

Dispute

In mid-April, Elon Musk made an offer to buy back all Twitter shares at $ 54.2 per share. Transaction worth $ 44 billion. Twitter executives initially saw this as an attempted hostile takeover, but a settlement was reached and a final agreement was reached with management on April 25 for the purchase of Twitter. In late April, there were press reports that Musk wants to introduce fees for using the ad-free platform. He also declared his intention to open an account for the former US president Donald Trump which closed after the elections in fall 2020. As it turned out later, something completely different led to the failure of one of the most famous transactions on the M&A market. Musk saw the huge potential of the social media platform that can be unlocked by fighting spam bots. It was this factor that turned out to be a bone of contention.

Key 5%

Elon Musk expected evidence that Twitter bots accounted for less than 5% of all accounts. In his opinion, the greater number of fake accounts significantly reduces the profitability of a company, which in turn reduces its value. However, no one expected what would happen on July 8 this year. On Friday, Tesla’s boss told the world he was withdrawing from the Twitter takeover deal as the company had failed to fulfill its contractual obligations and failed to provide the requested information on the number of fraudulent accounts and spam.

forced marriage “

Twitter’s board of directors did not let this information go unnoticed. Twitter CEO Bret Taylor released a statement that his company intends to take legal action against Musk to force him to abide by the terms of the deal and take over Twitter. Elon Musk commented on this on his Twitter account (sic!) In his own style – he posted an eloquent graphic (meme):

Source: Twitter account of Elon Musk

Neither Musk nor Twitter officials are likely to be amused as both sides of the alleged deal have agreed to pay up to $ 1 billion under certain circumstances. From 2:20 PM Twitter (TWTR.US) fell 6.85% in pre-market trading to $ 34.29 per share.

Time will tell if the above battle ends with a fixed buyback of $ 54.20 per share, at a lower price, or one of the biggest media disappointments in history.

Twitter shares (TWTR.US) in chart D1. Source: xStation 5

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