It’s Looking Like Elon Musk’s Twitter Deal Might Not Go Through (UPDATE)

UPDATE: Yup, as expected, Stunt Queen Elon has let Twitter know in a letter from his lawyer that he’s terminating the deal, and it’s probably going to get legally messy. via Market Watch:

“Mr. Musk is terminating the Merger Agreement because Twitter is in material breach of multiple provisions of that Agreement, appears to have made false and misleading representations upon which Mr. Musk relied when entering into the Merger Agreement, and is likely to suffer a Company Material Adverse Effect.”

Below is the original post:

Well, I’m starting to think that Elon Musk won’t end up being Twitter’s official cringe-based overlord after all (I really shouldn’t have pre-ordered those 200 t-shirts to sell out of my car). We’ve known for a while that Elon has been stalling on his $44 billion purchase of Twitter since he made a deal with them in April.  Since then, Elon has been pulling some “Whoops, I must have left my wallet in the car!” shenanigans, by way of accusing Twitter of not being totally forthcoming about how many Twitter users are spam bots. And by all accounts, it sounds like Elon might be changing his wallet-in-the-car story to just straight-up dine-and-dashing.

Three sources close to the situation spoke to The Washington Post about it recently, and I currently have Weird Al stuck in my head because those sources claim that (cue the music) the deal’s in jeopardy, baby. They say that Elon isn’t really communicating where communication is needed.

Musk’s team has stopped engaging in certain discussions around funding for the $44 billion deal, including with a party named as a likely backer, one of the people said. The people spoke on the condition of anonymity because of the sensitivity of the ongoing discussions.

Talks with investors have cooled in recent weeks as Musk’s camp has raised doubts about the recent data “fire hose” – a trove of data sold to corporate customers – they received from Twitter. Musk’s team’s doubts about the spam figures signal they believe they do not have enough information to evaluate Twitter’s prospects as a business, the people said.

It has been said that it’s not exactly easy to verify how many of Twitter’s users are fake bots, and Elon has reportedly demanded an exact number (which, as I mentioned, allegedly isn’t as cut and dry as it seems). So without Elon being able to do a proper head count on all those spam bots, he will allegedly be making moves to move away from that deal – at least according to those three anonymous sources.

That, of course, would be a problem for Elon, who signed a contract to buy Twitter. And, that’s a contract Twitter is committed to enforcing. WaPo says that the contract Elon signed likely had a note about backing out of the deal, but that it was probably in reference to something major happening and messing everything up. WaPo believes that the bot issue wouldn’t qualify as a valid reason to leave the deal. If it goes to arbitration or court, Elon might be on the hook for a $1 billion pull-out fee.

WaPo also hypothesizes that the bot issue isn’t the real reason why Elon might back out. Shocking, I know – the man who claims to be a penniless couch-surfer might not be telling the truth about his motivations for leaving a $44 billion dollar social media deal. Elon might be getting cold feet because his takeover announcement caused Twitter’s stock to drop.

The spam accounts are not the only reason Musk might try to wriggle out of the deal. Twitter’s share price has fallen dramatically since his takeover bid in April, leading to the impression that he is overpaying. And Musk also runs two other major companies, Tesla and SpaceX, along with some start-ups.

Twitter released a statement responding to the rumor that Elon is trying to back out of the deal, and they said what they’ve kind of said before, which is that they’re committed to the deal, and are cooperating with Elon on whatever information he needs.

If there was only a way for Twitter to convince Elon to just bite the bullet and go through with the deal. Hmmm…maybe they can remind him that there are always more real users than fake spam bots, which objectively makes this a good deal. And with Elon personally helping to increase the population, more future users means a greater potential to earn back a return on his investment.

Pic: Patrick Pleul/DPA/Cover Images