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Just in case anyone isn't seeing through the bullshit of Elon Musk, let me lay this out for you: On April 14th: Twitter stock was worth about $45. Tesla stock
by mabbo 4y ago
Just in case anyone isn't seeing through the bullshit of Elon Musk, let me lay this out for you:
On April 14th: Twitter stock was worth about $45. Tesla stock was worth about $985. Elon's contract said he would sell $13B worth of Tesla stock (about 13.1m stocks) as part of the plan to buy Twitter for $44B, $54.20 per share. A good deal for the Twitter shareholders even at the time. (23% higher than the market said it was worth).
On May 13th: Twitter stock is worth $40[0]. Tesla stock was worth about $769. So now Elon would have to sell 16.9m shares of Tesla, 28% more, to get a company worth 12.5% less. All signs pointed to both stocks continuing to decline along with all of tech, so the deal was getting worse and worse every day for Elon, and better and better every day for Twitter's shareholders.
Elon Musk will say or do anything he has to in order to cut his losses. There's that well-talked-about $1B get-out-of-deal fee that everyone thinks he'll be able to use. But that's actually not a valid thing- that was only if the SEC blocked the deal. He's contractually obligated to buy the company.
Elon is screwed. All the noise he is making is not going to get him out of it because the Twitter shareholders will hire lawyers just as good and expensive as his- and they are in the right.
[0]And even then $40 is only because the stock was pumped up from Elon saying he's buying it all. If not for that, it would be even lower- meaning this is an even better deal for the shareholders.
- xiphias2 4y agoEven though you are totally right, I can’t fault Elon for having a sour grape feeling and trying to renegotiate hard with all the tools he’s got. Millions of lawyer fees are nothing compared to the billions of losses he is going to have from the deal.
- DoesntMatter22 4y agoRealistically he may not take a loss in the end. If Elon does buy it and is able to get into payments and charge Businesses for their account, they could quite possibly quadruple or better their income.