Summary: Elon Musk, Tesla and SpaceX CEO, confirmed he remains uncertain on his Twitter purchase, citing three key problems that are delaying and could potentially keep the acquisition from happening, in an interview with Bloomberg. Twitter announced in April that it accepted a $44 billion Musk bid at $54.20 per share to buy the entirety of ...
Elon Musk, Tesla and SpaceX CEO, confirmed he remains uncertain on his Twitter purchase, citing three key problems that are delaying and could potentially keep the acquisition from happening, in an interview with Bloomberg.
Twitter announced in April that it accepted a $44 billion Musk bid at $54.20 per share to buy the entirety of Twitter in order to make it more user friendly, accessible and to defeat the Twitter bots. However, the legal procedure began at that point, with Musk acquiring funding and Twitter’s board of directors actually needing to accept the proposal.
Then in May, Musk said that he put the Twitter acquisition on hold “pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users.”
Now Musk is confirming that May sentiment by saying that the acquisition is still on hold citing that same initial reason of bot percentage verification along with two other reasons: debt financing and shareholder approval.
As far as debt financing is concerned, the South African native secured $25.5 billion of fully committed debt, including $12.5 billion in loans against his Tesla stock. He also sold 9.6 million Tesla shares worth about $8.5 billion to further fund his purchase. However, he is still short and plans on receiving the remaining financing via bank loans, but it still remains uncertain at this point.
Lastly, Musk mentioned shareholder approval being the final obstacle. Investors are expected to vote on the deal in late July or early August to determine the future of Twitter. The question is, do they want it to remain a public company, or would they rather see it go private under the guise of Musk? That remains to be seen.
“Will the debt portion of the round come together? And then will the shareholders vote in favor?” Musk said Tuesday.
Twitter’s board certainly seems to favor the Musk purchase as it recommended to shareholders that they vote for the adoption of the merger agreement, according to a filing with the U.S Securities and Exchange Commission (SEC). Here is the quote from the filing that sums up Twitter’s position on the matter:
In addition to talking about Twitter, Musk joined Nouriel Roubini and Goldman Sachs Group inc. in warning that the U.S. economy is likely to fall into a recession. While he noted that a recession is inevitable, he feels that the likelihood of that reality is gaining traction currently.
“Well I think a recession is inevitable at some point, as to whether there is a recession in the near term I think that is more likely than not, but it is not a certainty,” Muks said.
The Tesla CEO also talked about laying off 10% of his salaried workforce at Tesla, saying that they grew at a rapid rate and now must make cuts. Musk emphasized that while they are cutting down on salaried employees they plan to hire more hourly employees.
Author: Tyler Irvin