Buying Twitter: Why Elon Musk Changed His Mind – Business


Elon Musk is familiar with price manipulation. He repeatedly fueled the herd instinct with his tweets stock exchangemade prices soar or people into billions Bitcoin spoof Dogecoin investing. Some of these were bad jokes, some were based on their own economic interests. Again and again he brought the US Securities and Exchange Commission against itselffor making misleading or false claims about his company, Tesla.

Musk also got the markets buzzing on Tuesday. But this time not with a moody tweet, but with two more formal letters, a letter to the Twitter Board of Directors and a mandatory filing with the SEC. Allegedly, Musk would like to end the drama surrounding the supposedly fixed and then called off Twitter takeover a surprisingly undramatic end by killing Twitter at the agreed price of $44 billion.

Anyone who owns Twitter shares should celebrate. Within a few hours, the share price rose by more than 20 percent. Finally, in April, Musk had agreed in writing to pay $54.20 per share. In September, the value bobbed between $40 and $43, and now, at $52 per share, it’s approaching the price Musk would have to pay if he felt bound by the purchase agreement.

However, the current price is still around four percent below the possible proceeds. So shareholders are not quite sure yet whether it will really happen as Musk is now proposing. There are good reasons for this caution. For one thing, Musk has proven several times over the past six months how little his word is worth. When in doubt, tomorrow he is no longer interested in what he says today as long as he expects an advantage from it.

Twitter has not yet agreed

On the other hand, Twitter has not yet agreed to the offer. The board of directors distrusts Musk and senses negotiating tactics. Those responsible fear that Musk may just want to avoid the court case, which is scheduled for mid-October. Twitter and Musk had sued each other after the Tesla boss with obviously advanced arguments withdrew from the purchase. The judge has already indicated that she has little understanding of Musk’s position.

Musk had to assume a multiple defeat. At the end of the process, he would not only have had to pay the purchase price, but also made a fool of himself. In addition, hundreds of messages Musk exchanged with celebrities and tech industry leaders were released last week during the trial. Lots of chats are embarrassing for those involved, Musk isn’t doing well either. It is possible that Musk and his acquaintances would have been faced with further unpleasant revelations.

So it makes sense for Musk to avoid confrontation in court. At the same time, there are good reasons for Twitter to be cautious. Before the company agrees to the proposal and drops its lawsuit against Musk, the board of directors wants guarantees that Musk will end up paying. The only public statement is very brief: “We received the letter from the Musk side,” they said. The intention is to complete the transaction at a price of $54.20 per share.



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