Elon Musk has announced that his plans to buy Twitter are “on hold,” though his explanation doesn’t make much—or, really, any—sense.
“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users,” Musk tweeted early Friday morning. A few hours later, he added, “Still committed to acquisition.”
Still committed to acquisition
— Elon Musk (@elonmusk) May 13, 2022
Musk did not explain how this news affects his interest in the company. He has been vocal about wanting to rid Twitter of bots but what percentage of accounts did he actually think those made up? And how high did it have to be for him to be interested? And why is he just now concerned about this report from a filing made almost two weeks ago?
In reality, no one believes this is actually about bots. There’s been speculation for a while now that Musk would look for a way out of his $44 billion deal. He and Twitter have agreed on their terms and Musk said he acquired the necessary funding (from some super shady sources BTW) but he doesn’t officially own the company yet and could still back out—although that would come with a $1 billion penalty.
On top of that, Musk got a $6.25 billion loan secured against his Tesla stock, the price of which has been plummeting, meaning his loan is at risk. All in all, it makes sense that Musk is grasping for excuses to either renegotiate the deal to pay less for Twitter or to get out of it entirely.
1/ @elonmusk’s claims should be treated with tremendous skepticism and with a critical eye.
— Angelo Carusone (@GoAngelo) May 13, 2022
Let’s assume what he says is true. Then that means he put together a $44 billion offer without basic essential information. At best, it is reckless and business associates should run now. https://t.co/fqitfTuNW8
3/ The lenders for his Twitter deal can demand more stock to secure the loans. But thing is, Musk just doesn’t have much uncommitted Tesla stock to play with.
— Angelo Carusone (@GoAngelo) May 13, 2022
Put another way, if Tesla stock keeps falling, he may not even have enough shares left to guarantee the loans.
4/ So, no, I don’t think this about bots. This is about @elonmusk’s ideology getting ahead of his obligations to Tesla shareholders and his erratic behavior tanking Tesla value.
— Angelo Carusone (@GoAngelo) May 13, 2022
Elon Musk is famous for making wildly ambitious claims and then backing out or letting things fall apart. Perhaps he’s realizing that all of this was too much work to go through just to let bigots, transphobes, and Donald Trump (redundant, I know) run rampant on the site.
(image: Joe Raedle/Getty Images)
