Let’s see if I’ve got the story straight — in late April, Elon Musk signed a contract to buy Twitter for $54.20 per share. He offered to pay $43 billion for it. Musk thought he could make Twitter more profitable than it is. He also called himself a “free speech absolutist” and dropped big hints that he wouldn’t censor anybody or block accounts because they wrote outrageous things, which made Musk a hero on the Right.
Most people thought Musk was nuts and that he’d be better off putting his money into more charging stations for his electric cars. Most people thought that attempting to run an uncensored Twitter would be a galaxy-class headache. There was also much weeping and wailing over the possible death of Twitter as a reasonably useful social media platform, because Musk was expected to screw it up.
Since April the deal has been off again, on again. I confess I haven’t followed the saga that closely and don’t know what all the problems were; nor do I care.
Now Elon Musk has decided he does not want to buy Twitter. Part of the reason for that may be that tech stocks, including Twitter stock, have dropped like a rock since April. Twitter stock as I write this is $36.81. But Musk is still locked into that $54.20 share price. Not a good deal.
Musk is making noise about Twitter misleading him about how many Twitter users are actually bots. Some observers think this is just an issue Musk is trying to use to break the contract. Twitter is determined to make Musk stick to the contract.
Musk started searching for ways to not buy Twitter at $54.20 per share. His fundamental problem was that he had signed a contract to buy Twitter for that amount, and that contract, according to most qualified people who looked at it, gave him almost no wiggle room to exit the deal before closing. Absent proof that Twitter had misled him in a major way—one that had a “material adverse effect” on the company’s value, a high standard to meet—he would need to pay a $1 billion breakup fee to walk away. And even that might not do it, as the contract established that Twitter could take Musk to court and try to get a judge’s order to make him pay every red cent of his $44 billion bid.
Musk had his answer: He did not want to buy Twitter for what he agreed. But he needed a question that could make that answer work in public and in court, and his lawyers settled on, “Hey, Twitter. How many fake accounts do you really have?” Twitter has estimated that less than 5 percent of its users are fake accounts or bots. The company has been transparent (including, recently, CEO Parag Agrawal doing a big thread about it) that the 5-ish percent figure is just its best estimate. Musk has kept raising the subject. In June, Twitter gave Musk a big ol’ chunk of tweet data, nominally so he could do his own investigating but really so that he’d have less of an opening to claim, in service of nuking the deal, that Twitter was withholding crucial information. And you will never believe this, but it is now July, and Elon Musk’s camp is still claiming that Twitter has not gone along with his fact-finding mission about spam.
Sounds about right. And Musk will probably spend a ton of money on lawyers before he finally bites the bullet and pays the $1 billion to Twitter.
And now Trump has turned on Musk, calling him a bullshit artist. I can’t tell if this is because Musk not buying Twitter after all or because he said publicly recently that he never voted for a Republican. Trump had believed Musk was one of his voters. So I guess Musk isn’t the sweetheart of the MAGA crowd any more.