Musk Issues Ultimatum To Twitter CEO Or His $44B Deal Could Evaporate
Musk has been tweeting up a storm since his bid of $44 billion was accepted last month by the social media platform. Shortly after the deal was struck, Twitter stocks declined. As of earlier today, the stock was down a further 2.75% pre-market ($37) from the high of $50 at the time Musk's offer was accepted.
The tech billionaire has been very vocal about the deal, tweeting often about how many fake/spam accounts exist on the platform. In one recent tweet, Musk responded to Agrawal with a poop emoji after the Twitter CEO tweeted, "Externally, it's not even possible to know which accounts are counted as mDAUs on any given day."
Most recently, Musk responded to a tweet by Teslarati that the fake/spam accounts are actually quadruple Twitter's claim of <5%, and could actually be higher. He said that Agrawal publicly refused to show proof of <5%, and ended his tweet with what could be taken as an ultimatum, "This deal cannot move forward until he does."
Some believe that Musk is trying to manipulate Twitter's stock price by painting the platform in a more negative light, in an attempt to force the company to accept a lower offer. Others think he may be trying to wiggle his way out of the deal entirely.
It should be noted that Musk waived his right to due diligence when he agreed to buy Twitter last month. It was presumably to embolden Twitter to accept what the Tesla CEO said was his "best and final offer" following the platform's board attempting to evade a buyout. It could be argued that Musk is getting what he asked for in terms of bot accounts.
Twitter remains adamant that it is "committed to completing the transaction on the agreed price and terms as promptly as practicable," according to a recent Bloomberg tweet.
In a recommendation to shareholders, the board recommended that it vote for the adoption of the merger agreement. The document also outlines the conditions under which the acquisition deal may be terminated, which include by mutual agreement; by either party if the deal has not closed by 5 pm PT on October 24, 2022 (barring an applicable extension); or if the deal fails to gain shareholder backing.
Musk's options for exiting the deal seem to be limited. However, should he find a "legal" way of doing so he will more than likely still be required to pay a $1 billion break-up fee. With the deadline for the deal being in October, we are likely to see many more tweets from both Musk and Agrawal concerning the deal.
Top Image Credit Daniel Oberhaus (2018)