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What an excitement. With a tweet of all things, Elon Musk sent the Twitter share plummeting today. The deal is temporarily on hold, the entrepreneur wrote succinctly. The fact that he later added that he was still committed to the purchase didn’t really help anymore.
The background is the exact number of user accounts that are fake, meaning there is no real person behind them. Musk isn’t sure Twitter is actually reporting the number correctly — and is waiting for more data on that. This is relevant because every real human being is a potential target for advertising. But not fake accounts. So it’s about the value of Twitter.
Whether that’s a reasonable reason to put the $44 billion deal on hold remains to be seen. After all, it’s no secret that there are not only journalists and politicians on Twitter, but also lots of bots. If their number is so economically relevant, one might think that it would have been included in the purchase price.
The world is puzzling over Musk – again
So the world is once again making oracles about what the eccentric multi-billionaire actually wants to achieve. Would he like to withdraw from the purchase contract through a back door? push the price? Pressure management?
Only Elon Musk knows that himself. Outsiders are limited to taking note of his erratic business practices. Because Musk keeps his promises is by no means always a foregone conclusion. The US Securities and Exchange Commission (SEC) has taken legal action against Musk several times because his tweets missed price manipulation by a hair’s breadth.
Anything but handshake proof
He once announced that he was considering taking the carmaker Tesla from the stock exchange. Incidentally, via Twitter instead of via ad hoc reports to the stock exchange. The Tesla share price then jumped. Coincidentally or not, so-called short sellers had speculated on falling prices at just this time.
So it’s no wonder that the announcement that Twitter would be delisted, as well as all other details of the sale, met with skepticism from shareholders. Twitter’s share price was below Musk’s offered price per share prior to today. Tesla stock was also hit because Musk wanted to use it to secure funding for the Twitter deal.
The Twitter case is thus increasingly becoming a touchstone for Musk’s legal capacity. If he overdoes it with the capers and ends up with the purchase, it will probably be even more difficult for him to secure money for his ideas in the future. As brilliant as they may be sometimes.
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