The case of the Twitter takeover of corrupt billionaire Elon Musk is full of twists and turns. After announcing the suspension of the sale due to doubts about the number of fake accounts present on the social network, Musk seems to have come up with a plan, with a very specific goal: getting Twitter cheaper. Explanations.
The famous 5%
What is Elon Musk playing on Twitter? The billionaire uses tweets as a weapon. After announcing its acquisition for 44 billion dollars, it took two steps back to the networks. The first announced that the sale was “on hold”, due to doubts about the number of fake accounts present on the social network. The second, more alarming, states that the transaction can be aborted if there are no guarantees at this point.
As a reminder, the boss of Tesla or even Space X pressed the pause button, waiting for fake accounts to represent less than 5% of the 229 million active users on the social network. A figure that is actually less according to New York Times. Twitter personally wrote the existence of ” applied significant judgment “to set the number of fake accounts on its platform to 5%, and declare that their”the actual number may be higher than its estimate“.
The tech giant’s tweets, in any case, caused an earthquake in the stock market, as Twitter’s share price plummeted. The title was traded Monday for $ 37.4, far from the $ 54.2 per share Elon Musk proposed in his takeover offer. But in reality, this whole story can be a sham led by the billionaire to get the social network cheaper. how
A great maneuver
In fact, 2 particular points cast doubt on the billionaire’s maneuver. First of all, different remember that 5% of fake accounts have been listed in Twitter’s filings with the SEC (Securities and Exchange Commission) since the company went public nine years ago. So, Musk should have known about it beforehand, and asked for verification before issuing his purchase offer.
Moreover, the verification method it requires is based on a random sample of only 100 accounts, strange.
But in reality, this maneuver will develop, first, in to derail the sale, then prove that the number of truly “profitable” users is less than Twitter officially announced. So the tech mogul can be pay less than the initial $ 43 billion to get the social network.
For his part, ” Wall Street will now consider the deal as imminent, or an attempt by Musk to negotiate a lower purchase price “, announced the analyst of investment company Wedbush Securities.
3 point mounting
On top of this maneuver, Musk made a whole financial package beneficial to him to secure the sale. In fact, the billionaire is based on himself typically borrowing from banks and investors, on loans secured in Tesla shares, but also on the direct sale of Tesla shares up to $ 21 billion.
A montage made from scratch for the boss of Tesla and SpaceX by its bank partners will create a debt for Twitter where the company will have all the difficulty in the world to pick up on its own.
It’s just a bad capital structure to deal with a business like Twitter, which hasn’t yet proven profitable, explains John McClain, portfolio manager for Brandywine Global Investment Management. It’s a long -listed company, and it doesn’t seem to have really figured out how to monetize its audience. “
A case set to last?
However, not everything is so simple. And Musk took it some risks in the formation of this assembly. In fact, the agreement between him and Twitter provides a billion dollar rest fee in case of withdrawal. In addition, the contract includes a “specific performance clause ”which states that the billionaire is obligated to keep his or her promise if its funding plan remains viable, the New York Times.
So here’s a deal that looks set to take a while. We look forward to more twists, as well as new tweets from the billionaire to try to tip the scales in his favor. Stay focused, close. Less subtle, this recent poop emoji is addressed to the current Twitter boss.