Elon Musk is provocative
A unilateral statement that the acquisition of Twitter Inc is “pending”. Strong criticism of how the social media company handles spam accounts. A “poop emoji” directed at Twitter CEO Parag Agrawal. These are just a few of Elon Musk’s tweets over the past four days, culminating in the Tesla CEO’s suggestion at a conference in Miami on Monday that his $44 billion contract could be renegotiated at a lower price.
I’m not suggesting malice in the algorithm, but rather that it’s trying to guess what you might want to read and, in doing so, inadvertently manipulate/amplify your viewpoints without you realizing this is happening
— Elon Musk (@elonmusk) May 15, 2022
Elon Musk posted this tweet on May 15, stating that Twitter’s News Feed classification algorithm is made in such a way that it “manipulates/amplifies” our views.
Twitter believes Musk’s comments violated the non-disparagement terms of its agreement to buy Twitter, according to people familiar with the matter. Still, the San Francisco-based company hasn’t taken legal action against Musk over what it sees as his ‘trolling’ of the deal, and only plans to do so if he doesn’t pay. not necessary tasks to complete the transaction, the sources said.
One of the sources involved in the transaction added that Twitter was trying to “block out the noise”.
The number of fake accounts and bots block negotiations
Representatives for Musk have continued to engage with Twitter, the sources say. They have prepared information for submission to regulators and, if they continue to cooperate, Twitter plans to file its notice of intent this week, which will explain to its shareholders how the deal went down, the companies added. sources.
At the same time, some Twitter executives and advisers fear that Mr. Musk is setting the stage to renegotiate the deal and are preparing to defend the deal in court, the sources say. They pointed out that Musk’s comments on the deal were becoming increasingly negative. “The more I ask questions (about the issue of spam accounts), the more my concerns grow,” Musk said at the Miami conference on Monday.
The sources asked not to be identified as they were discussing the confidential planning of the operation. Representatives for Twitter and Musk did not respond to requests for comment.
Some of Twitter’s executives were not indifferent to Musk’s comments. On Monday, Mr Agrawal took to Twitter to defend the company’s method of counting spam accounts, while Bret Taylor, chairman of Twitter, tweeted on Friday that “we remain committed to our agreement”.
Twitter stock closed Monday’s session at $37.39, 5% lower than before Mr. Musk revealed on April 4 that he had accumulated a stake in the company, and 31% less than the transaction price of $54.20 per share. This indicates that investors believe Musk is very likely to walk away or renegotiate the deal at a lower price.
Twitter continues to feed Musk information about spam accounts, the sources said. Mr. Musk is entitled to this data as part of his proposed acquisition of Twitter, under the terms of his agreement with the company. Musk questioned the accuracy of public information provided by Twitter that these accounts represent “far less than 5%” of its user base. Twitter clarified that this was an estimate. According to independent researchers, 9 to 15% of millions of Twitter profiles are bots. Mr. Musk said on Monday that he suspected the latter accounted for at least 20% of Twitter users.
One concern Twitter has when sharing information with Mr. Musk is that it could violate its nondisclosure agreement with the company and share confidential information about its platform and users, the company said. one of the sources. Musk argued that Twitter needs to make more information about how its platform works public.
Waiver of Due Diligence
Musk, the world’s richest person, waived due diligence when he agreed to buy Twitter on April 25, in a bid to get the San Francisco-based company to accept its “best and last offer”. Since then, tech stocks have plunged amid investor worries about inflation and the economic slowdown.
Musk is contractually obligated to pay Twitter a billion dollar severance fee if it doesn’t close the deal. But the contract also contains a “specific performance” clause that a judge can invoke to compel Musk to complete the deal. In practice, acquirers who lose a specific execution deal are almost never forced into an acquisition and usually negotiate a monetary deal with their targets.
Wedbush Securities called Musk’s reliance on spam accounts to put the deal on hold as a ‘dog excuse’, given the company has made the same statement about it since going public in 2013. “The harsh reality for Twitter is that no other strategic/financial bidders will approach this transaction and Musk knows it,” Wedbush analysts wrote.