Musk’s acquisition of Twitter put pressure on: not ruling out giving up the acquisition, related financing has been suspended

Image source: Visual China

Reporter｜Yu Hao

On June 7, foreign media quoted people familiar with the matter as saying that due to the uncertainty of the transaction, Elon Musk’s new financing arranged to reduce his personal cash in the process of acquiring Twitter has been put on hold. proportion.

Musk’s previously planned $2 billion to $3 billion preferred stock financing from private equity firms led by Apollo Global Management Inc has been put on hold due to uncertainty over the deal until the situation becomes clear about the acquisition.

In addition, the changes also affect banks that had previously pledged $13 billion in debt financing, the people said. While it is also preparing to offer a syndicated loan, the bank plans to wait until the transaction process has clearly started.

In mid-April, Musk offered to buy Twitter for $44 billion (about $54.20 per share), but in early May said the deal was on hold and needed more details to prove Twitter’s “spam or email.” The number of “fake accounts” is indeed below 5%.

Then on June 6, Musk went a step further and threatened to “walk away from the acquisition,” publicly accusing Twitter of violating the merger agreement by not providing the spam and fake account data he requested. Musk claims that the true number of spam accounts may be much higher, possibly as high as 90%.

And he has previously said the acquisition “cannot move forward” until the company provides “evidence” of spam metrics. A lawyer representing Musk also said, “This is a clear and material breach of Twitter’s obligations under the merger agreement, and Musk reserves all rights arising therefrom, including his right not to complete the transaction and the right to terminate the merger agreement.”

Some analysts pointed out that this may be a buyer strategy to pressure Twitter to obtain a lower negotiated price than $44 billion. At the end of May, Twitter shareholders filed a class action lawsuit in the Northern District Court of California, accusing Musk of using the current chaotic acquisition transaction to manipulate the stock price, resulting in the violent fluctuation of Twitter’s stock price, and the so-called “” bot accounts” complaints were part of its plan to “manipulate stock prices”.

From the perspective of stock price, the unrest in the market has indeed affected Twitter’s stock price. As of the close of trading on June 7, Twitter’s stock price has fallen by 16.33% from a month ago.