Did you hear about a guy who had been desperately trying to buy a company with $44b, fighting hard against its board which initially showed resistance to the deal? But now that he has finally managed to force the board to accept the deal, he is trying to escape away! And guess what? the same board which was severely refusing is now pursuing the same guy to force him into the same deal!
Well, I remember seeing something like this when I was a kid watching Tom & Jerry. This time, it's not Tom & Jerry, it's rather Elon and Twitter...
What happened in a nutshell?
It was not too long since Twitter evoked a "poison pill" tactic to prevent Elon Musk from taking over it after he had announced his intentions to buy the company last April for $44b. After a protracted discussion, the Twitter board of directors accepted the offer, and Elon cheered on his Twitter account with one word- YESSS
The good times didn't last for long, however, as stock markets along with crypto and the broader economic situation started to decline in May due to inflation, the Russian invasion, and supply chain issues among other factors. This was the time when Elon Musk started to raise questions and concerns about the "bots" on Twitter, and how much they make up the total Twitter userbase.
Elon demanded info from Twitter on the accurate percentage of the monetizable user base and how many bot and fake accounts are out there. Twitter claimed it had given Musk the information he needs to assess its claim that spam accounts make up fewer than 5% of daily active users, a claim Elon seems to strongly doubt...
"Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users"
Then came the latest twist in the saga where Elon said he pulled out from the deal because Twitter "failed to provide enough information on the number of fake and spam accounts." Twitter CEO Brett Taylor wrote in a tweet that the company was committed to closing the deal on the price and terms agreed upon with Elon Musk, threatening legal action. And as you might guess, Elon started making fun of him
Is it a cat-and-mouse game?
Let's look at it with a bit of an objective eye. Bots and fake accounts are a long-existing issue on Twitter and other social media that have been around for years. Elon was well aware of it when he first presented his 44-billion-dollar offer to buy Twitter. So, what has changed so that Elon wants to raise the issue again at this point?
According to critics, It's not too much about the "bots" as it is about the renegotiation of the deal. Just look at the current state of the stock markets now and compare it to what it was two months ago. All markets are down by double-digit figures. Stock, big tech companies, crypto...etc
Despite all the markets falling, Twitter stock is the one suffering the most, down more than 30%.
Elon seems to have "cold feet" on taking over Twitter during the current circumstances and this of course for good reasons, given nobody knows for sure how long the blood bath on the markets is going to last. However, Elon can't simply say he is feeling "buyer's remorse" . He certainly wants a pretext to get out of the deal while saving face- not to mention the one-billion break-up fee involved.
On the other hand, I strongly believe that Elon is still interested in acquiring Twitter in the medium to long term. It is a goal that Elon is not going to give up easily. Even Elon's younger sister doesn't seem to believe that he is going to back out from it
If he says he’s going to do it I would believe that he’s going to do it,” Tosca Musk
In my humble opinion, Elon is just playing a "cat-and-mouse" game with Twitter. He is effectively using his immense influence and fame to persuade this board to drop the previous price and accept a deal more in line with current market conditions. It is hard to tell whether it'll work out or not, either way, it's interesting to keep a close eye 👀
What do you guys think? I'm keen to read your opinions and thoughts...
PS, Unless otherwise stated, all images in this post are either my own design or from free photo-sharing sites (e.g. pixabay.com)