The reversal of things came so fast! Just a few minutes ago, Tesla (tsla. US) CEO musk said that "we are still committed to the acquisition (twitter)". As of press time, twitter fell 11% before trading on Friday, narrower than the previous decline of more than 25%; Tesla rose more than 6%.
Just about two hours ago, musk sent a document saying that the deal to buy twitter (TWTR. US) was temporarily suspended because he was waiting for details about the calculation that false or spam accounts really account for less than 5% of users.
It is reported that Twitter said in its latest quarterly results that "in the first quarter of 2022, false or spam accounts account for less than 5% of monetized daily users". Now, however, twitter says it has made a "major judgment" on the latest estimate, and the actual number may be higher.
Cracking down on fake or spam accounts has always been the top priority of Musk's reform of twitter. In a statement announcing the acquisition of twitter last month, musk revealed that he wanted to defeat spam programs, authenticate everyone and open source its algorithm; He also expressed the hope that the platform would become a fortress of freedom of speech and eliminate the obstacles brought by content censorship.
Twitter announced on April 25 that it agreed to Musk's acquisition offer of $54.2 per share and a total of $44 billion. However, in recent days, the market has increasingly questioned whether musk can successfully acquire twitter and whether musk may consider reducing its bid.
As of Thursday's closing of U.S. stocks, twitter closed down 2.19% to $45.08; The gap between the stock's current share price and Musk's $54.2 purchase price further widened to $9.11, the largest price difference since musk announced its acquisition of twitter.
On Thursday, twitter CEO Parag Agrawal told employees in an internal memo that Bruce Falck, general manager of Revenue Department, and kayvon beykpour, general manager of consumer department, would leave the company. In addition, twitter would freeze recruitment and reduce a number of expenses. These changes reflect the current unstable state of twitter.
Hindenburg research, a short seller, warned on Monday that if musk abandoned his acquisition of twitter, the deal risked repricing. "We believe that this is a significant risk for the company to withdraw from the current market value," said master. "If we take the initiative to sell short, we will take the initiative to sell 50% of the company's market value."
In addition, Hindenburg also believes that if the transaction is carried out in its current form, when the acquisition is completed, Twitter's leverage will be as high as 8.6 times its profit before interest, tax, depreciation and amortization (EBITDA), which will make Twitter's healthy financial recovery more challenging.
Peter Schiff, a well-known gold bull and chief economist of Euro Pacific Capital, said in Musk's tweet: "it seems that I've always been right. You never really planned to buy twitter. You've been bluffing. How many twitter shares did you sell before this announcement?"
Previously, according to people familiar with the matter, musk is negotiating to raise enough equity and preferred stock financing for the plan to acquire twitter, so that Tesla shares do not have to be used as collateral to obtain margin loans. Wedbush analyst Dan Ives believes that more than 90% of Musk's acquisition is possible, but he also expects more twists and turns in the future. Perhaps as Dan Ives said, "this is a soap opera. It will have many different chapters."