On 9th July news broke out that Elon Musk had pulled out of his deal to buy social media platform Twitter for $44 billion. As per reports he claimed that this was because Twitter had not provided him with the required information on how many spam and fake accounts were on the site.
Musk had announced that he was going to buy Twitter in April of this year and it was confirmed properly in May. Now, Twitter is planning on suing Musk for backing out of the deal and take proper legal action against him.
Bret Taylor Chairman at Twitter posted that “The Twitter Board is committed to closing the transaction on the price and terms agreed upon with Mr Musk and plans to pursue legal action to enforce the merger agreement. We are confident we will prevail.”
If the transaction is not completed then as per the deal the Tesla and SpaceX boss will have to pay a $1 billion fee as a penalty.
However, it seems like a lot of people had already predicted that the deal will not go through and Musk will back out giving some excuse or another.
1. Twitter Users
As soon as news of a deal between Twitter and Elon Musk was made public, that too standing at a whopping $44 billion, a lot of people had a lot of things to say. Among them many predicted at that time itself that the deal will not be going through.
Read More: Elon Musk’s Daughter Files For A Petition To Change Name And Gender
2. Peter Schiff, Dan Ives
Peter Schiff, the Chief Economist & Global Strategist at Euro Pacific Capital had also in a tweet stated that the deal will not go through. He reiterated his point when around May 13th 2022, news came out that the Twitter deal was put on temporary hold after learning that the bot/spam accounts take up less than 5% of the total users on the app.
When Musk put the deal on hold in May Wedbush analyst Dan Ives said “Many will view this as Musk using this Twitter filing/spam accounts as a way to get out of this deal in a vastly changing market. The nature of Musk creating so much uncertainty in a tweet (and not a filing) is very troubling to us and [Wall] Street and now sends this whole deal into a circus show.”
3. Experts
Experts had noticed that Musk might be losing interest in the deal since in May the stock price fell by more than 25% of the agreed price of $54.20 per share that the deal was made on. This led to a lot of experts and investors believing that the deal will not be going through.
In a May report by Forbes, Michael Hewson, chief markets analyst at CMC Markets stated, “This is straight out of the Musk playbook, keeping shareholders on their toes” speaking about how Musk put the deal on hold and that there was a possibility Musk could back out.
In an April Reuters report, it wrote that “Traders fretted that Musk may not have enough money sitting around to fund his $21 billion cash contribution and could decide against selling some of his Tesla Inc (TSLA.O) shares to come up with it.” Musk’s usual flaky nature and the extremely low (to him) penalty fee were seen as being enough cause for concern.
4. Analysts
Reuters in a May report also stated that the stock market did not think the Elon Musk-Twitter deal will go through. As per the report “The implied probability of the deal closing at that price fell below 50% when Twitter shares hit $46.75, based on the $54.20 deal price and Twitter’s shares having closed at $39.31 on April 1, the last trading day before Musk revealed he had amassed a stake in the social media company.”
As per a CNBC report on May 17th “Investors have been dumping the shares on concerns that Musk is going to abandon his agreement, which would force him to pay a $1 billion breakup fee. Twitter’s stock has given up all its gains since Musk first disclosed his 9% stake in the company early last month.”
Some analysts and experts as per reports believe that even this move to call off the deal is more of a strategy by Musk to get the buy-out price lowered.
John Coffee, a Colombia Law School professor and a former adviser to the New York Stock Exchange and Nasdaq, was quoted by BBC News that “It’ll be a big battle, but I would predict it’ll be quietly settled. I think Mr Musk doesn’t expect to come out with a victory. I expect that he’s hoping that he can knock another 10 or 20 billion off the price he agreed to pay.”
Coffee also said that the chances of Musk winning the suit with Twitter are not that high he doesn’t have a “great legal argument”.
Image Credits: Google Images
Feature Image designed by Saudamini Seth
Sources: Telegraph, CNBC, Hindustan Times
Find the blogger: @chirali_08
This post is tagged under: Elon Musk Twitter, Elon Musk Twitter deal, Elon Musk Twitter deal backout, Elon Musk, Elon Musk buys Twitter news, elon musk twitter, Elon Musk twitter news, Elon Musk Twitter takeover, Elon Musk buys Twitter, twitter takeover
Disclaimer: We do not hold any right, copyright over any of the images used, these have been taken from Google. In case of credits or removal, the owner may kindly mail us.
Other Recommendations:
Roasts On #DeleteTwitter, #LeavingTwitter Trends Are So Fun To Read This Boring Tuesday
…this is incredibly stupid. FIrst off, these deals take a lot of time and negotiations. Secondly it is still, currently, on going. Utterly retarded