Tesla Inc TSLA

RE:Reuters Breakingviews: Elon Musk probably won’t buy Twitter

[mrbb]

the news outlets are having a hay day on elon news they can pump out, even from the same news outlet like Reuters. 

 

April 27, 2022 at 12:06 PM EDT

Breakingviews: Elon Musk probably won’t buy Twitter

By Lauren Silva Laughlin and Gina Chon

NEW YORK, April 27 (Reuters Breakingviews)

 

 

May 2, 2022 at 2:44 PM EDT

EXCLUSIVE Musk in talks for new Twitter financing-sources

By Chibuike Oguh and Krystal Hu

 

Musk's conversations with the private equity firms are another indication he is pressing on with the acquisition after he signed an agreement to buy Twitter on April 25.

yanster2419 wrote: https://www.reuters.com/breakingviews/elon-musk-probably-wont-buy-twitter-2022-04-27/
 
April 27, 2022 at 12:06 PM EDT
Last Updated 5 days ago
 
Breakingviews: Elon Musk probably won’t buy Twitter
 
By Lauren Silva Laughlin and Gina Chon
 
NEW YORK, April 27 (Reuters Breakingviews) - Four years ago, Elon Musk vowed to set up a peanut brittle company to take on Warren Buffett’s iconic U.S. confectioner See’s Candies. Then he changed his mind. It wouldn't be surprising if Musk's $44 billion deal to buy social network Twitter went the same way.
 
Sure, the Tesla boss was clearly serious about acquiring Twitter as of recently. The financing from Morgan Stanley is shored up. The agreement includes a fee of $1 billion that he – or Twitter – would have to pay if they renege on the contract. And Twitter’s lawyers even wedged in a so-called “specific performance” clause, which could theoretically force Musk to buy the company if he threatens to back out, though in practice this could probably be settled by adding to the break fee.
 
There are good reasons for him to get cold feet. The biggest is Tesla. The electric-vehicle maker’s stock has fallen around a fifth since Musk first revealed his stake in Twitter, partly because Musk may sell shares to fund his new adventure. If Tesla’s stock bounces back – likely if the Twitter deal falls away – the $40 billion of recouped wealth would more than make up for the break fee.
 
China is a major sticking point too. Tesla produces half of its vehicles there, as well as a quarter of its revenue. But Twitter is no friend to the People's Republic, most recently for defying Beijing in its handling of content related to Hong Kong protests. China could easily hold Tesla to ransom if a Musk-owned Twitter didn’t play ball. That’s uncomfortable for a self-professed “free speech absolutist.”
 
In reality, Musk’s absolutism probably won't survive a Twitter deal anyway. European Union Commissioner Thierry Breton told the Financial Times this week that the company must police illegal or harmful content or risk being banned. In the United States, where regulators are less aggressive, other technology firms could effectively create the same threat. Apple, for example, gets to decide which apps appear in its influential store.
 
One thing makes it easier for Musk to walk away before any of this becomes a problem: The market partly anticipates it already. Twitter’s stock is currently trading 11% below his offer price – a fairly wide spread for a deal with little antitrust pushback. Musk’s tweets criticizing some company actions – potentially flouting the merger agreement - already suggest he might be starting to lose interest. Most likely, Musk's attention will wander elsewhere. It wouldn't be the first time.