This is the kind of budget decision you’d expect from a teenager with a first-time job and not the richest man in the world. From the start, when Musk said it “seemed unfair” to expel people for being conservative about buying a nine percent stake in the takeover bid, it all felt like an impulsive buy by someone with a lot. of money to cover it, but with little thought. Now that Musk has had time to think about things (Buffet would have valued the investment for a year), he wants to leave. He is trying to pump the brakes and pull back. But he will cost him a lot more than the $ 1 billion murder commission in the deal and that’s the assumption that he has that option.
First, here’s the cover story, what you see from the outside. From Washington Post:
Elon Musk said on Tuesday that his $ 44 billion offer to buy Twitter “can’t go on” until the social media firm’s CEO shows evidence that fewer than 5% of the platform’s users are fakes.
Tesla’s chief executive’s tweet comes the day after he said he might try to renegotiate to pay less and accused Twitter of potentially misleading him about the percentage of fake accounts on the website, in the clearest signal that he might be trying to get out of the way. ‘agreement.
At a conference in Miami on Monday, Musk said a lower price was not “out of the question,” the latest indication that he could distance himself from his initial $ 44 billion offer, announced on April 25.
Demonstrating bot numbers and real accounts is all part of the evaluation, which is a key due diligence step in normal acquisition. The fact that Elon behaves this way is a Twitter mistake that he could not have foreseen is a little too much to swallow by the teenager … the richest man in the world.
Now the problems in diving. Elon can’t say “I changed my mind” and pay a billion. According to CNBC:
Musk and Twitter agreed on a so-called $ 1 billion reverse resolution fee when the two sides reached a deal last month. However, the breakup fee is not a payment option that allows Musk to save himself without consequences.
A reverse dissolution fee paid by a buyer to a target applies when there is an external reason why a deal cannot close, such as regulatory brokerage or third party funding issues. A buyer can also walk if there is a fraud, assuming that the discovery of incorrect information has a so-called “material adverse effect”. ‘
In other words, to even have the privilege of paying the commission of a billion kills, Musk now has to do the due diligence he should have done all along and review the Twitter fundamentals he should have used before assessing the share price. But the burden of proof is about Elon to show that there are significant discrepancies between the documents and reality, while Elon’s tweet seems to believe it is Twitter’s job:
20% fake / spam accounts, while 4 times what Twitter claims, could be * much * higher.
My offer was based on the accuracy of Twitter’s SEC statements.
Yesterday, the Twitter CEO publicly refused to show proof of <5%.
This agreement cannot go on until it does.
– Elon Musk (@elonmusk) May 17, 2022
His offer was based on whatever job he put in the offer. He needed to verify accuracy before making the offer. Now Elon has to prove that the deposit is significantly wrong, 20% would certainly be fine, but this is on Elon and only then is he qualified to pay the billion dollar murder tax.
Behind the scenes, Elon’s main problems go far beyond the number of Twitter bots and the overvaluation of Twitter. Elon’s wealth is disproportionately based on his Tesla stock ownership which swooped down at the news and has yet to recover, costing Musk far more than $ 44 billion, and Tesla’s loss represents the ethers’ value of capitalization. market and not in new investments.
Second, as readers have surely noticed, cryptocurrency is in a global depression-level crisis, threatening to “disappear” $ 1.7 trillion in wealth, and Musk has been heavily involved in the cyrpto-market. Of course, the cryptocurrency crisis didn’t completely fall until Elon made the offer of him.
But to sum it up, Musk can’t write a billion dollar check and walk away, or he definitely would have by now. He would probably have accumulated the same billion by the end of the rising Tesla stock trading. No, now it’s up to Musk to test Twitter and prove the documents are incorrect. It’s not Twitter’s job. (Although Twitter would like to be able to prove that the 5% figure is correct right now and take advantage of the price offer, it probably can’t.)
Musk’s pompous tweet is typical of Musk and typically adolescent. He points the finger at someone else when the only person to blame for his reckless offer is himself.
Meanwhile, Musk has also done permanent damage to his reputation by stepping out of the MAGA closet to prove he’s not a centrist who just seeks reasonable speech. Now, he personally described himself as now from the central part of the MAGA and played a lot of the part, taunting others in that classic fake tough talk that is the essence of the MAGA movement. He can never get it back. The total cost of his madness cannot be known, but it will end up being a lot more than a billion dollars and he won’t even have his new shiny toy.
Jason Miciak believes that a day without learning is a day not lived. He is a political writer, features writer, author and lawyer. He is a dual citizen of Canada who spent his teens and college years in the Pacific Northwest and has since lived in seven states. Now he’s enjoying the single dad life of a young girl, writing from the Gulf Coast beaches. He loves making his own flower pots, cooking, while also studying scientific philosophy, religion and non-mathematical principles underlying quantum mechanics and cosmology. Do not hesitate to contact for intervention commitments or any doubts.