Musk treats twitter like a cat and mouse; First calm and lurk, then attack suddenly, then fiddle back and forth, and finally swallow it completely. It only takes musk three months to win the world's most influential social network. At the end of January, it began to quietly acquire 9.2% equity of twitter, becoming the largest shareholder of the latter; At the end of March, public opinion began to warm up and publicly attacked many problems of twitter.
In early April, the company announced its shareholding ratio, which triggered various speculation in the market; In mid April, the company rejected the invitation of Twitter's board of directors and directly made an offer for acquisition. After the twitter board of directors rejected the poison pill plan, musk broke through one by one and took advantage of shareholders' dissatisfaction with the board of directors to force the non voting board to finally accept the offer in just a week.
Just as the outside world thought that Twitter was his own and began to look forward to many product and policy changes after the acquisition, musk killed another shot back, which surprised twitter investors.
The world's richest man suddenly tweeted this morning and announced that he would temporarily suspend his $44 billion acquisition of twitter until he confirmed whether twitter robots and false accounts really account for only 5% of the total number of Twitter users. One stone caused thousands of waves, and the market speculated whether musk wanted to give up the deal.
This speculation is not groundless. Tesla's share price has continued to fall sharply in the past few trading days. Among them, there are not only the factors of the decline of the U.S. stock market, but also the concerns of investors about musk himself. Musk's main assets come from Tesla, whose stock price fluctuations will directly affect his personal wealth and drag down the amount of mortgage loans he holds with Tesla.
Previously, it was rumored that after musk acquired twitter, he intended to personally serve as an interim CEO for a period of time to urge twitter to adjust its product business. Tesla investors can't help worrying: musk, who is already full of itineraries, now has to take into account the transformation of twitter. How much time does he have for Tesla's long-term development?
As a master of time management, musk is currently also the CEO of Tesla and SpaceX, as well as two start-ups of underground tunnel transportation, boring comany and neurolink. His private plane shuttles intensively in Fremont (Tesla Silicon Valley factory), Los Angeles (SpaceX headquarters), Austin (Tesla headquarters and Texas factory) and Brownsville (SpaceX Texas launch base).
Therefore, after musk tweeted the suspension of the acquisition transaction, the stock prices of the two companies were like a knee jerk reaction: Twitter's share price suddenly plummeted by 20%, while Tesla's share price soared by 8% during the session. Obviously, twitter investors were discouraged and Tesla investors were pleasantly surprised.
Last Friday, musk came to Twitter's San Francisco headquarters and held a secret meeting with Twitter management and the board of directors to discuss the twitter business and the promotion of the transaction. The meeting was not made public. However, elonjet, who tracks the whereabouts of Musk's private plane, shows that Musk's private plane took off from San Jose, the southernmost part of Silicon Valley, and landed in San Francisco that day. It flew for 9 minutes and traveled 50 kilometers. It was obviously to attend the twitter conference.
This trip also brought a lot of criticism to musk. Many people on twitter also questioned musk: they shout about environmental protection and emission reduction every day, but they are not interested in practicing it. They have to take a private plane even 50 kilometers away. Where does this mean environmental protection. However, Gates also faces the same question. Maybe billionaires' time is too precious to wait.
Just two hours later, musk suddenly tweeted that he was still committed to the acquisition of twitter. This tweet narrowed the decline of twitter, and Tesla slightly retook its increase. Finally, twitter closed down 9.7%, with a current market value of less than $32 billion. Tesla shares closed up 5.7% with a market value of nearly $800 billion.
So, is Musk's Twitter robot Navy problem true? Could he give up the deal to buy twitter?
Of course, there is a problem with the Navy. Almost every social media platform has a large number of false accounts registered by machines, and Twitter is no exception. Musk repeatedly criticized the existence of a large number of robot Navy accounts on twitter last year. When he made a takeover offer, he also promised to focus on solving this problem after completing the acquisition.
However, twitter did not hide the problem. The data quoted by musk comes from the report submitted by twitter to the SEC, in which twitter said, "according to the internal evaluation of the sample account, the robot false account in the quarter is less than 5% of the monthly life of the platform, but this figure is based on the internal evaluation of the sample account, so this estimation may not accurately reflect the real number of such accounts, and the number of robot false accounts may be higher than this expectation." Moreover, Twitter has expressed this since its listing prospectus in 2013.
In other words, Twitter has already announced its estimated proportion of robot Marines. Perhaps musk believes that the proportion of twitter Navy is far more than 5%, and its information disclosure is seriously untrue. But he knew this problem when he signed the acquisition agreement, and now he has not come up with new evidence to support his reasons.
Why did musk suddenly talk about water army users? Is he backing out?
More than a month after he disclosed his shareholding in twitter, Tesla's share price fell by nearly a quarter, directly from $1145 to $728 yesterday. Of course, this is more because of the overall decline of the U.S. stock market, the high risk aversion of investors, and the sale of stocks that rose too high before, Tesla can not be spared.
However, Tesla fell more than the NASDAQ index, which is also directly related to Musk's acquisition of twitter. Investors are worried that musk cannot focus on Tesla business, and more worried that musk will continue to sell Tesla shares for cash in order to raise acquisition funds. In the past six months, musk has sold Tesla shares and cashed in more than $20 billion.
On the other hand, the decline in Tesla's share price also means that Musk's personal value has directly shrunk by more than $30 billion. He holds 17% of Tesla, which is the main asset component of musk. The decline in Tesla's share price means that musk has less money available for mortgages.
In order to reduce his investment proportion and leverage risk, musk has been actively contacting investors and obtained US $7.1 billion in financing, including venture capital giants such as Sequoia Capital and Anderson Horowitz, as well as super rich partners such as Oracle founder Ellison and coin security founder Zhao CHANGPENG. After getting the financing, Musk's proportion of mortgage loans held by Tesla also decreased from $12 billion to $6.25 billion.
However, Twitter's share price is also falling sharply. At present, the market value is even less than $32 billion, which is farther and farther away from Musk's offer of $44 billion. Investors are also worried that musk may change his mind because it means he has to pay a higher premium.
So is musk really likely to give up buying twitter? Unlikely. He has signed a $44 billion acquisition agreement with the twitter board of directors, which has legal effect. If he abandons the acquisition, he must pay $1 billion in breach of contract. Twitter can even sue and ask the court to force him to complete the transaction.
There are legal precedents in this regard, and the reasons are the same as musk. In January 2001, Tyson Foods, the largest chicken supplier in the United States, planned to expand its business and reached an agreement to spend $3.2 billion to acquire IBP, a beef packaging plant. But just one month later, Tyson food announced that it would temporarily postpone the transaction because of problems found in the IBP audit. The problem does exist, and the securities and Exchange Commission (SEC) has therefore launched an investigation into IBP. However, Tyson food immediately announced that it would give up the acquisition on the grounds that there was no trust between the two companies.
The abandoned IBP lost a lot of share price. The company then filed a lawsuit in the Delaware court, claiming that Tyson food was informed of relevant issues when signing the acquisition agreement and asked the court to force Tyson food to complete the acquisition transaction. Finally, the Court adopted IBP's statement and held that the acquisition agreement signed by both parties was legal and should be implemented. Tyson food had been informed of the risk at that time, so it ordered Tyson food to complete the transaction. More than 20 years later, IBP is now a pork and beef subsidiary of Tyson food.
Musk is unlikely to give up the acquisition of twitter, but he may find reasons to force the twitter board to reduce the offer again. After all, Twitter's share price has fallen sharply in the past month, farther and farther from his $44 billion offer. Perhaps the Navy robot is an excuse for him to put pressure on the twitter board.
On the other hand, the twitter board also has good reasons not to buy musk. According to the acquisition agreement they signed with musk, musk agreed not to make negative comments on twitter on the public platform until the acquisition is completed.
But musk, who goes his own way, obviously doesn't pay attention to this restriction. Last week, he publicly forwarded major negative news criticizing Twitter's restriction on the dissemination of Biden's son's notebook scandal during the election, putting great pressure on Twitter's general counsel, who is directly responsible for this decision. This week, he again publicly attacked the issue of Twitter's robot Navy. Even if twitter had disclosed information before, musk didn't know about it for the first day.
On twitter, musk almost ignores any rules like former president trump. In 2018, he publicly announced on twitter that he would privatize Tesla for $420, resulting in heavy losses for Tesla bears. Later, the SEC investigation found that he did not get the financing guarantee, which was seriously untrue.
Under the threat of prosecution by the SEC, musk finally agreed to the settlement agreement, paid a fine of $20 million, resigned as chairman of Tesla, and agreed that tweets involving major transactions of the company need to be pre examined by legal counsel. Although the U.S. media has regarded the settlement agreement as the leniency of the SEC, musk is still very dissatisfied with it. He believes that it limits his freedom of speech and decides to sue for the withdrawal of this tweet restriction. Of course, this claim was directly rejected by the court.
In the process of acquiring twitter, musk also has information disclosure violations. According to SEC regulations, master had to disclose more than 5% of his shares late, but master had to submit the information. Given that Twitter's share price soared by 30% after he disclosed his shareholding, musk disclosed 11 days later, which is equivalent to enjoying 11 days of low price discount. This "delayed disclosure" operation led musk to another SEC investigation and investor prosecution.
From today's Twitter, musk has no intention of being cautious on twitter. The world's richest man does whatever he wants.
Sina Technology Zheng Jun from Silicon Valley