What is Elon Musk going to do?
It’s not the first time, it’s the question in mind Twitter executives, global investors and many of his 92 million followers, after the richest man in the world announced, in a tweet, spontaneously, that His purchase of the social media platform is “temporarily suspended”.
The impact was immediate, an initial 16% drop in the price of shares he valued at $54.20 (£44.50) three weeks ago in a $44bn (£36.1bn) buyout. pound).
Trigger appears to be a Reuters news story about a Twitter announcement 10 days ago that estimated the number of spam or false accounts at less than 5% of the platform’s 229 million users, but admitted that the number This may not be correct.
That’s the kind of problem that could have been resolved during due diligence – the process by which buyers and their banks closely scrutinize the company they’re acquiring – had. Musk did not waive that step to urge the Twitter board to make a swift decision on his offer.
Musk has waged war on “spam bots,” automated accounts that thrive in Twitter’s anonymous abuse swamp, a plan central to his manifesto alongside “liberalism.”
If there are fewer bots than previously thought, there may be less scope for rapidly transforming user experience.
If there are more, it’s less real account holders can increase revenue.
Similarly, the rush to pause could be a convenient excuse for the rocket billionaire to jump on the bandwagon to buy stocks after a two-week tech sell-off on Wall Street.
While Netflix and others suffered, Twitter fell nearly 20 percent from Musk’s offer, suggesting the market is losing confidence in a deal being done at that price point.
For those wondering if he’s overpaying, it’s definitely the same as it is now.
With his social media statements amplified by a broad and loyal investor, the Tesla boss is a man who often sows chaos in the markets, but wipes billions of dollars off the value of a company. The goal would be bold even by his standards.
Abandoning the deal would cost him $1bn (£820m).
So whether the pause is part of a deliberate play in time, or a product of twitching fingers and a magpie’s brain, remains to be seen.
In a second Tweet, posted after two hours of intense speculation, he wrote: “Still committed to buyback”.
It’s unlikely to be the last word.
