Update: the NYT notes that Twitter’s 5% figure is “not new” so for Musk to claim a material change in condition seems to be a stretch. This could very well be a negotiating play for a lower value. Maybe Musk has cold feet.
"Since the terms of the deal were established, there have been significant market shifts for both Twitter and Tesla, the source of the lion’s share of Musk’s personal wealth. Tesla stock has dropped more than 25 percent since Musk made his offer on April 14th as part of a broader market downturn."
"The falling share price could have a material impact on Musk’s ability to close the deal since a portion of the funding was initially secured through loans against Musk’s stake in Tesla. However, recent reporting from Bloomberg suggests Musk has arranged for new equity partners to assist in financing the deal, obviating the need for the loan."
"Twitter has also struggled, announcing an overcount of user numbers in its most recent earnings and continuing to operate at a loss. More recently, CEO Parag Agrawal abruptly fired two senior executives, raising significant questions about the company’s future. Combined with the market downturn, that has led some analysts to believe Musk might attempt to renegotiate for a lower price."[1]
Despite the rough week I've had, I'm glad I'm miles and miles away from anything to do with Musk or Twitter at the moment. (And on that note, I'm off to replenish my popcorn supplies.)
Update: the NYT notes that Twitter’s 5% figure is “not new” so for Musk to claim a material change in condition seems to be a stretch. This could very well be a negotiating play for a lower value. Maybe Musk has cold feet.
"Since the terms of the deal were established, there have been significant market shifts for both Twitter and Tesla, the source of the lion’s share of Musk’s personal wealth. Tesla stock has dropped more than 25 percent since Musk made his offer on April 14th as part of a broader market downturn."
"The falling share price could have a material impact on Musk’s ability to close the deal since a portion of the funding was initially secured through loans against Musk’s stake in Tesla. However, recent reporting from Bloomberg suggests Musk has arranged for new equity partners to assist in financing the deal, obviating the need for the loan."
"Twitter has also struggled, announcing an overcount of user numbers in its most recent earnings and continuing to operate at a loss. More recently, CEO Parag Agrawal abruptly fired two senior executives, raising significant questions about the company’s future. Combined with the market downturn, that has led some analysts to believe Musk might attempt to renegotiate for a lower price."[1]
Despite the rough week I've had, I'm glad I'm miles and miles away from anything to do with Musk or Twitter at the moment. (And on that note, I'm off to replenish my popcorn supplies.)
[1] https://www.theverge.com/2022/5/13/23070422/musk-twitter-buyout-acquisition-analysts-stock-drop