Donald Trump will have to wait to find his Twitter account, which Elon Musk wanted to restore: the boss of Tesla and founder of SpaceX indicated, on Friday July 8, in a document sent to the American stock market authorities, that he refused to buy the social network Twitter for 44 billion dollars (43.2 billion euros), accusing the company of providing “false and misleading” data on the number of fake or dormant accounts.
It is therefore a legal battle that begins, insofar as the board of directors of the social network intends to force the sale. “Twitter’s board of directors is committed to completing the transaction at the price and terms agreed to with Mr. Musk and plans to pursue legal action to enforce the merger agreement.” We are confident that we will prevail in the courts of Delaware,” the state where the trial would take place, Bret Taylor, chairman of the group’s board, immediately fired back. On Friday, after the New York Stock Exchange closed, Twitter stock was down sharply, 5%, around $35, well below the $54.20 price offered by Elon Musk in April.
It is not certain that Elon Musk, 51, will achieve his ends, according to the analysis of American lawyers quoted by the press. The richest man in the world, whose fortune is estimated at 220 billion dollars by Forbes magazine, must pay a penalty of 1 billion dollars if he cannot raise the necessary financing. But this sum is not a safe-conduct to escape the sale. For this, substantial events would have to affect the company, which is not proven.
The courts could thus force the sale. In their letter to the Securities and Exchange Commission, the stock market regulator, Mr. Musk’s lawyers put forward a whole series of arguments to justify this thesis, in particular “diminishing business and financial prospects”. They denounce the company’s ill will: “Sometimes Twitter has ignored Mr. Musk’s requests, sometimes it has rejected them for reasons that seem unjustified, and sometimes it has pretended to comply while giving Mr. Musk incomplete or unusable information. »
Elon Musk’s willingness to withdraw is not a surprise. As early as May 13, he announced that his acquisition was on hold, due to lack of information on the famous suspicious accounts, which he estimates can reach 20% of the total. The acquisition, made in the name of defending free speech, had a side of costly caprice on the part of Mr. Musk, who has been speaking on Twitter with complete freedom for years.
In April, he announced, to everyone’s surprise, that he had acquired 9.2% of the company’s capital. But the proposed price has since become extremely high with the fall of technology stocks on Wall Street. At least Mr. Musk has it for him to have ceded to finance this acquisition 8.5 billion dollars of Tesla shares at an average price of 883 dollars, whereas they no longer list today at 752 dollars. However, his dithering and multiple tweets have done a lot of damage to his reputation, revealing a whimsical temper and giving the impression that he is not focused on the two most important companies in his empire, Tesla and SpaceX.
Elon Musk has been making sweeping statements for months. He directly opposes President Joe Biden, who has snubbed Tesla since the beginning of his mandate, on the pretext that the company is not unionized. Entrepreneur doubts Joe Biden is in charge: “Whoever controls the teleprompter is the real president!” “, he tweets now. In mid-June, the native of South Africa announced that he had voted Republican for the first time – in favor of the candidate of Mexican origin Mayra Flores during a partial legislative election in the state of Texas, of which he is now resident.
He also predicted “a massive Republican outpouring” for the midterm elections in November. And for the 2024 presidential election, it is the governor of Florida, Ron DeSantis, former protege of Donald Trump, who has his favors. More and more clearly, the libertarian ideas of Mr. Musk are tilting him in the Republican camp.
Twitter in tatters
In recent days, it has been his statements in favor of the birth rate that have occupied him. The press revealed that he had, in 2021, twins with a leader of one of his companies, Neuralink, which brings the number of his children to ten, one of whom is deceased. This Friday, Mr. Musk, who laments the low American birth rate, was not talking about the acquisition of Twitter, but about helping families: “Children are worth it if possible. I plan to significantly increase childcare allowances in my companies. Hopefully other companies do the same,” he tweeted, intending to give details “next month.”
Meanwhile, the social network Twitter is in tatters. His boss, Parag Agrawal, is constantly reorganizing his teams. In May, he fired two executives, Kayvon Beykpour and Bruce Falck, who oversaw Twitter’s consumer products and revenue, including engineering, customer service and operations. He also carried out layoffs in the hiring cell.
Elon Musk has messed up the teams by directly challenging them and discussing his plans, such as the possibility of correcting tweets already published. The social network fails to take off, its stock market value being lower than its introduction price on the markets, in 2013, where it ended the day at 45 dollars.
The whole affair is a huge mess, and the stock market rules have been abused to say the least. Financier Ross Gerber summed up the sentiment on Twitter: “This is definitely not the way to buy a business. Probably for the best for Elon, in the long run. It’s going to be a very complicated divorce. Disappointing result in many ways. Nobel laureate in economics (2008) Paul Krugman was more acerbic: “Somebody has to say it: given his poor ability to control his impulses, Elon Musk looks like the Boris Johnson of tech. »
At least he’s belatedly trying to jump ship Twitter, while Tesla shareholders are a little reassured, with a boss now more focused on the future of this company the automaker’s stock gained more than 2% after the fencing.
Find all the episodes of the series “Elon Musk, an American hero” here.