Twitter said it is committed to completing Elon Musk’s $44bn deal at the agreed price and terms, despite the Tesla founder’s continuous floundering.
The eccentric billionaire has said that the social media giant must prove claims about the proportion of spam and fake users on its platform before his takeover can go ahead; this is despite the fact that Twitter has openly said its bot estimates are estimates and not exact figures.
He is demanding more data about the exact numbers, and has suggested the deal ‘cannot move forward’ without this.
Twitter CEO Parag Agrawa took to Twitter to clarify the state of play yesterday in a lengthy Twitter thread.
He concluded: “There are LOTS of details that are very important underneath this high-level description. We shared an overview of the estimation process with Elon a week ago and look forward to continuing the conversation with him, and all of you.”
However, the growing consensus amongst analysts is that Musk is trolling the takeover process, with Bloomberg’s Matt Levine suggesting that Musk’s claims that the deal was “temporarily on hold” last week were simply “not a thing”.
In reality, Musk has signed a binding contract requiring him to buy Twitter, and any breaking of this would require him to pay a $1bn breakout fee.
Though he later tweeted he was “still committed to the acquisition”, Musk still sent the Twitter stock tumbling as much as 25 per cent in pre-market trading.
The mood today feels similar for Twitter, which has seen its shares plunge over eight per cent in pre-market trading.
Whilst the Federal Communications Commission (FCC) commissioner Nathan Simington has already shut down talk of the agency blocking Elon Musk’s acquisition, stating “The FCC cannot, and should not, block this sale,” the turbulence of deal feels pressing, with some regulation feeling necessary.
Discussing the concerns about free speech, Simington said in early May: “It would be not only unconstitutional, but plainly un-American, for any arm of the government to act against Twitter or Mr. Musk for such a purpose.”
Commenting on the regulatory side, Head of TMT Research at Mirabaud Neil Campling told City A.M.: “Given the entities are in the US then it really should be the U.S. Securities and Exchange Commission (SEC) who should be investigating all of these loose lipped comments by Musk that only find their way into filings after they are spoken – whereas securities’ laws state the opposite.”
“There is definitely an irony (and perhaps deliberate) comment from Elon Musk that his offer was based on Twitter’s SEC filings being accurate when he has often been accused of ignoring SEC filing rules and regulations”, he said.
“Musk knows he holds all the cards in this game of Poker. There is no new seat at the table that is going to suddenly appear to be a white knight to the Twitter board. IF, and it’s a BIG IF, there was a deal to be had… the only certainty is that it will be for a fraction of the original offer price”, Campling concluded.
As Hargreaves Lansdown senior investment and markets analyst Susannah Streeter said, Musk’s Twitter takeover “was always destined to be a bumpy ride”.