ANew doubts have been raised about the takeover of Twitter by Elon Musk. The Washington Post now wrote that the transaction is in “serious danger” and that some discussions with investors who could help with the financing have been interrupted. The newspaper cited unnamed people familiar with the matter.
An issue that Musk has been talking about for weeks is described as an obstacle to the transaction. It’s about the number of “spam” or “fake” accounts on Twitter that aren’t owned by real users. Twitter says their share of published user numbers is less than 5 percent, Musk doubts that and suggests the number could be much higher. The share price fell by 4 percent at times on Friday and, at around $37, is well below the takeover price of $54.20 negotiated with Musk, which corresponds to a total of around $44 billion.
Musk agreed to acquire Twitter in April, but after a few weeks he began to publicly question it. He declared the purchase agreement “temporarily suspended” and claimed he had the right to cancel it altogether. He referred to his alleged concern for fake user accounts. Many observers consider the justification to be false and see it as a maneuver to get out of the actually binding contract or at least to negotiate a lower price afterwards.
The general economic environment has clouded over significantly since the acquisition was agreed, shares in technology companies in particular have lost significant value, and Musk’s wealth, which was primarily tied to his stake in the electric car manufacturer Tesla, which he manages, has also melted.
Musk has put together a financing package for the acquisition that consists of loans and equity. This equity should come partly from himself, but also partly from other investors. Twitter initially resisted Musk’s advances, but is now firmly in the position of wanting to go through with the transaction on the agreed terms.
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