A few months ago, Elon Musk surprised the internet (as the billionaire likes to do) with a A $44 billion bid to buy out Twitter after joining and leaving the Twitter board shortly after.
However, the deal unexpectedly ground to a halt when Musk questioned whether he had officially published Twitter statistics about fake accounts on the platform. utilities, CNBC Reports that Musk has three issues with the Twitter deal that must be resolved if the deal is to move forward.
There are three issues that need to be resolved for the Twitter deal to go through
After bidding $44 billion to make Twitter his private business, Elon Musk changed his mind. Doubt about the number of fake accounts on the social media platform, the multibillionaire threatened to walk away from the deal if accurate information was not provided. Of course, this means he could be paid a reported $1 billion fee for breaking the deal. Now Musk has shared his top three issues regarding the buyout. If they are resolved, the deal could go through, it seems. Here they are:
Fake accounts created by bots
This was actually the main reason why the deal was initially put on hold. Musk was concerned that the actual number of fake accounts on Twitter was higher than what Twitter had reported. And that’s why he’s pushing for more clarity on how many actual users (aka real people) use Twitter.
Twitter previously announced that the number of fake bot accounts was less than 5% of the platform’s daily active users, but Musk had a problem with that number. He also underlined that this is probably not what most people experience on Twitter.
So far there is no resolution on this quite important issue.
The portion of debt needed to fund the deal
Well, well, it seems that multibillionaires need to take out loans too. The second problem Musk has is that a pretty significant amount of funding has to come from bank loans. Pretty much, he promised to pay $33.5 billion in cash. He also received $7.1 billion in equity financing commitments from investors. The rest is borrowed from banks.
Musk may be a billionaire, but most of his wealth is in Tesla stock. He has now pledged billions in Tesla stock as collateral for those loans, but it seems he doesn’t like the situation very much.
How this will be solved is still somewhat unclear at the moment.
And last but not least, Musk needs to get approval from Twitter shareholders before the deal becomes a reality. Investors are expected to vote on the deal in late July or early August.
As you might imagine, whether or not Musk will get shareholder support is a mystery. You know, he’s being sued by some Twitter shareholders for the chaotic approach to the squeeze-out deal, so some may not be in favor of him taking over.
As you can see, it’s not just the disputed number of bot accounts on Twitter that made Musk question the deal. Factors such as financing and shareholder approval also appear to play a major role in whether or not this deal is completed.
However, the reported number of fake accounts is difficult to resolve. Initially, when the dispute over the matter got a bit heated (on Twitter of course, where else – and with Musk’s curious choice of emojis), Twitter’s CEO, Parag Agrawal, underlined that Twitter should use private information to conduct a third-party check on which accounts belonged to bots. But Twitter does not share such information, so it was impossible to carry out the check, according to Agrawal.
Well, we’ll have to wait and see what happens as it’s starting to look like the deal isn’t going to go through in the end.