Elon Musk remains unconvinced by the market that he will actually buy Twitter at the promised price. Shares are trading well below his $54.2 bid and he continues to stoke uncertainty. This Tuesday, at an event organized by Bloomberg in Doha, the founding tycoon of Tesla and SpaceX indicated that three issues still need to be resolved to complete the purchase: false user accounts, funding and shareholder approval.
The volume of fake user accounts, which are actually bots or automated accounts, is the main issue that has been used to cool down an offer that was made before the market collapsed and tech stocks in particular, and therefore now seems very generous. The richest man in the world with an estimated fortune of around $ 200,000 million (around 190,000 million euros) protested on Tuesday that he did not trust the company’s data.
“Fake accounts and spam Twitter says they’re 5%, but that’s not our experience,” he stressed in Doha. Musk made his offer without a thorough prior review of the company, as is usual with this type of company, and he’ll have a hard time using that as an argument to back down. The financier signed a clause saying he would pay $1,000 million if he didn’t complete the purchase, but it’s possible the company could also sue him to enforce the deal, which he promised to pay around $44,000 million for the acquisition to pay business.
In addition to the fake accounts, which Musk says are “still a very significant issue,” the businessman added, “And of course there’s the question of whether that part of the debt will be paid off [para financiar la operación] and whether the shareholders vote for it”. The businessman continues to refuse to take the operation for granted, fueling speculation that he will try to lower the price or back down.
As for shareholder voting rights, there should be little doubt as the shares are trading 30% below the offer price and approving them means big profits. As for debt, Musk changed the company’s financial structure to decouple it from Tesla. First, he used shares in the company of which he is the majority shareholder as collateral for part of the financing, which was penalized by the market. Then it reduced this guarantee and finally separated both operations. Yes, Musk sold more than $8,000 million in Tesla stock for liquidity to buy Twitter. So far this year, Musk’s fortune has shrunk by about $65 billion, mostly due to Tesla’s stock market crash.
Musk said he sees no problems for Tesla’s operations in China, a key market for the automaker, if he buys Twitter. The social network is officially banned in China.
The tycoon has attempted to clarify his plans regarding Tesla’s workforce and headcount. He has said he expects a 10% reduction in the salaried workforce in three months, but that with the growth in hourly workers, the net reduction in the workforce will end up remaining at 3%-3.5%. “We hope to increase our workforce of hourly workers. On the salary side, we’ve grown very quickly,” he said in the interview, responding via conference call from the United States.
The Tesla and SpaceX founder was also asked if he has decided to vote for Trump if he runs in the 2024 presidential election: “I’m undecided at this point about this election.” Musk appeared last week to address the Florida Gov. Ron DeSantis as a candidate.