Posted originally on the conservative tree house on May 13, 2022 | Sundance
Earlier today Tesla CEO Elon Musk tweeted, “Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users.” He also said, “still committed to acquisition.”
While tech stocks have been collapsing over the past 15 days, from a big picture perspective this approach by Musk looks like a potential negotiation strategy to lower the offer. The actual number of spam/bot accounts on the platform is unknown.
CNBC – […] Twitter shares fell more than 8% Friday and are down about 23% from Musk’s agreed-upon purchase price of $54.20 per share. Part of the dip is related to an overall slump in technology stocks this month. The Nasdaq has fallen another 11% since the market close on April 25, the day Twitter accepted Musk’s offer.
“This is probably a negotiation tactic on behalf of Elon,” Toni Sacconaghi, Bernstein senior research analyst, said on CNBC’s “Squawk Box.” “The market has come down a lot. He’s probably using the guise of true active users as a negotiation ploy.”
Musk may feel some pressure or obligation to other potential investors in Twitter to lower the price, even if the world’s wealthiest man is more price agnostic.
Musk is in talks with outside investors for both equity and preferred financing to lessen his personal stake in Twitter. If he can get a lower price for Twitter, the returns could be higher for outside investors if and when Twitter returns to public ownership or is resold. (read more)