Twitter purchase: Elon Musk puts plans on hold for now

With his purchase of Twitter at a price of 44 billion US dollars, Elon Musk once again made the headlines. But it seems that the reigning richest man on earth is now backing out. Why? According to his own statements, he is still too unsure about the details that the short message service makes about some small things. Of course, the tech visionary immediately communicated his hesitation on Twitter itself. The share price of the social network was not pleased about it.

Faulty statements by Twitter?

That Elon Musk would even get away with his plan to buy Twitter was considered impossible even by experts. Now the billionaire got the go-ahead to take over the social network, but Musk sees a fly in the ointment that makes him want to put his plans on hold for now. Behind this is the fact that the Tesla CEO is a bit skeptical about the number of non-human Twitter accounts. According to Twitter itself, only less than five percent of the users are so-called bots. Now, for the time being, he wants to wait until there is certainty about this number. Until then, the purchase is in a kind of limbo. This has a particular impact on Twitter’s share price.

After all, it has been experiencing a real downturn since Musk’s hesitation was announced. The company has suffered a 25 percent drop in value. While the share was still heading for the $54.20 predicted by the buyer himself before Musk’s tweet, it now stands at just $34.50. But for experts, the value targeted by Elon Musk was just a farce anyway. After all, many experienced investors know that anything is possible with the tech billionaire. Even about-turns. For fear that the South African-born could back out, many shareholders therefore already jumped off after the takeover became known.

Elon Musk emphasizes purchase intentions

Of course, the dazzling tech visionary is also a connoisseur of his industry. Accordingly, Elon Musk is also aware that he is scaring off shareholders with his move. Nevertheless, he once again emphasizes that he definitely wants to buy the social network. However, this deal is far from being a done deal. After all, in addition to the Twitter board of directors, a large number of shareholders must also play along. Only when Musk can get enough shareholders to cede their shares will there be nothing standing in his way. It is possible that his procrastination tactics could now help persuade shareholders to sell their shares. According to the plan, however, both Twitter and Musk are fully on target. After all, both parties have talked about the purchase probably being completed by the end of 2022.

Speculations about money problems

Since Elon Musk was so euphoric on the part of Twitter’s board of directors when he made the commitment, it is nevertheless a little surprising that the deal has been put on hold for the time being. Accordingly, more and more voices are now becoming louder who speculate that the problem is not the unresolved question about the number of active bot accounts. Rather, some experts think that it might be an attempt to lower the price a bit. It is also possible that he wants to leave the business altogether and is just looking for a suitable argument.

No matter what the trigger for the whole thing may be, both indicate that the financing issue may not yet have been resolved. However, things won’t be quite so favorable if Musk does get around to withdrawing his offer. After all, there is already a contract in place that a withdrawal from the purchase is associated with a penalty of $1 billion – no mean feat. The theory about Elon Musk’s bulging wallet is not new. After all, it is now common knowledge that the Tesla CEO did not intend to use his own capital to buy Twitter.

Instead, just under 12 billion U.S. dollars are said to have been considered as a loan amount. In turn, he wanted to throw shares in his successful e-car maker into the ring as collateral for the bank. However, the plan doesn’t really seem to be working out. After all, only recently Tesla’s shares also sank noticeably into the cellar. At 728 U.S. dollars, the value of a share fell by a whopping 272 U.S. dollars. What bank would really accept this as collateral in view of the high loan amount? Accordingly, the tech visionary looked around for alternatives. Which financiers could come into question is still unknown.

Musk as a drawing card for Twitter?

Elon Musk would like to improve Twitter according to own statements at many adjusting screws. In addition to the above-mentioned problem with the fake accounts, he also sees other problems with the social network. Unlike many of its competitors, Twitter has not been able to exploit its potential in the eyes of Musk and other investors. If you take a look at TikTok or Instagram, for example, it becomes clear what would be possible with a better strategy. Accordingly, Elon Musk has already announced that he will transform Twitter in the course of his takeover. In particular, savings should ensure that the economic development changes for the better. We are curious to see how the story about the purchase of Twitter will develop further and will keep you up to date.