Elon Musk may not be able to fund his deal with Twitter, putting the Elon Musk-Twitter deal in jeopardy. Though Musk and his team would have people believe the takeover bid will fail because of that Twitter does not show its data on fake and spam accounts On the platform, people closely involved with the deal have revealed that much of this is due to Musk getting a little shaken by Tesla’s fall in value.
Musk’s team also believes it will not be able to confirm data on the number of fake and spam accounts on Twitter and has halted certain discussions about funding the acquisition, the report said.
Musk agreed to buy Twitter for $54.20 per share, a 38% premium to Twitter’s closing price on April 1, when the billionaire announced that he owned more than 9% of Twitter . Musk, who also runs Tesla and SpaceX, says Twitter doesn’t adhere to free speech principles and he thinks it would be best if the company went private.
After Twitter’s stock began falling, Musk said the deal could not move forward until Twitter provided more information about the number of spam and fake accounts on the platform. Musk said understanding the number of fake accounts is part of evaluating Twitter’s business, which makes most of its money from ad sales. Although Musk said a lower retail price isn’t out of the question, Twitter has stated that it has no intention of lowering the price. The company also reportedly provided Musk with a wealth of data.
Elon Musk originally planned to leverage part of it his shares of Tesla to fund his bid to buy Twitter. Given that Tesla’s new plants in Germany and Texas have proven to be “money furnaces” that required billions of dollars to set up and operate, Musk and his team have stopped engaging in funding talks for the $44 billion deal .
However, there’s a chance Musk might actually go through with the acquisition at a much lower valuation. Every time it is revealed that the Musk-Twitter deal could fall through, Twitter’s share price falls significantly. This time, when it became known that the deal was in serious jeopardy, Twitter’s shares fell four percent.
Daniel Ives, an analyst at Wedbush Securities, said in a note Thursday that his firm believes there is a 60 percent chance of that happening The deal will take place at a renegotiated price in the $42 to $45 per share range. There’s also a 35 percent chance that Musk will still walk away from the deal, pay the breakup fee, and likely tussle with Twitter’s board of directors in court.
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