Why Musk Is So Confident in Buying Twitter?
On Tuesday, Twitter Inc (NYSE: TWTR) released its account of its transaction discussions with Elon Musk, revealing that he chose not to raise the questions about the social media company’s operations that he has now referenced in placing the $44 billion acquisition “on hold.”
Musk is portrayed as rushing to close a transaction with his “best and last” offer, according to the story, which was released in Twitter’s proxy statement. The statement explains what shareholders need to know to vote on the acquisition. According to the proxy statement, Musk negotiated the Twitter acquisition during the weekend of April 23 and 24, without conducting any due diligence. Musk has questioned the integrity of Twitter’s public reports regarding spam accounts being fewer than 5% of its user base after signing the contract on April 25, arguing they must be at least 20%. Even though Twitter said in its filings that the numbers might be greater than it expects, this is the case.
Musk Questions Twitter’s Estimates
According to independent analysts, 9 percent to 15% of the millions of Twitter identities are bots. On Tuesday, Musk tweeted that Twitter CEO Parag Agrawal has failed to offer substantiation for his company’s estimate and that the acquisition cannot proceed until he does. According to Twitter’s proxy statement, Musk made no effort to get information about the issue in the run-up to the purchase.
Mr. Musk did not request a confidentiality agreement or seek any non-public information from Twitter, according to Twitter’s proxy statement. The proxy statement makes no mention of Musk’s warnings to cancel the agreement if he doesn’t figure out how many spam accounts are on the site, as he has stated on Twitter. Investors in Twitter appeared to believe that a transaction at the agreed-upon price was no longer possible. On Tuesday afternoon, Twitter shares were trading at about $37.55, down more than 30% from the $54.20 per share acquisition price. Musk hinted for the first time at a conference in Miami on Monday that the sale may be done for a cheaper price, without saying what that price would be. He has yet to notify Twitter of his desire to renegotiate the contract.
