Elon’s threatening to ditch his Twitter deal: it might be about buyer’s remorse, not bots
Well, this is awkward… Elon’s stint as Twitter’s new would-be owner could end before it begins. The Technoking’s threatening to back out of his $44B deal to buy the social-media company if it doesn’t give him more detailed data about how many of its users are bots. But Twitter’s standing pat, saying it plans to “enforce” the merger as is.
- Still on hold: Last month Elon said the (legally binding) deal is on “hold” until Twitter proves its claim that fewer than 5% of daily users are bots.
- Thwarts and all: In yesterday’s letter to the SEC, Elon’s lawyers said Twitter broke the deal first by “thwarting” Elon’s right to info, which they say gives him the right to bail.
Bots are getting all the blame… but they’re just part of the story. Twitter really does have a bot problem: experts estimate 10% of users are fake. But Elon has another big reason to back out of the deal: the price.
- Clipped wings: Twitter’s stock has fallen 23% since the takeover was signed, which means Elon’s on the hook for $14B more than the company’s current market value. Analysts suspect his real goal is to pressure Twitter into renegotiating at a lower price.
The law is on Twitter’s side… but time may be on Elon's side, if he’s willing to sit through a lawsuit. M&A experts say Elon has little legal ground to stand on, since he waived his right to inspect Twitter’s finances and signed a contract that forces him to follow through. Yet if Elon takes it to court, Twitter could get stuck in a pricey, drawn-out lawsuit that scares off employees, users, and investors. Twitter might decide to sell at a discount to avoid a legal battle with the world’s richest meme-lord.