Elon Musk sends Twitter stock plummeting

Takeover plans are on hold
Elon Musk sends Twitter shares plummeting

The major shareholder is temporarily putting the planned complete takeover on hold because he wants to wait for data on fake accounts. The stock market price has meanwhile fallen by around a quarter.

People were just discussing whether Donald Trump should return to Twitter. Twitter major shareholder Elon Musk has not yet commented on his return after his public moral indignation about Trump’s exclusion in January 2021. And before the question arises as to whether the former US President could soon delight his former and new followers with masses of tweets after Musk completely took over Twitter, the topic has already been settled again. At least for now.

Because Musk, who has held nine percent of Twitter so far and wanted to take over the short message service completely, has put the deal on hold for the time being. Reason: Musk wrote on Twitter that he wanted to wait for calculations to be made as to whether accounts without real users actually accounted for less than five percent of all users. The company had announced these figures.

Musk’s latest ideas are not fake news, not alternative truth. But bitter reality for Twitter shareholders, who had to watch on Friday as the price fell by a quarter after the most recent message from their major shareholder because many sold their shares. On Friday afternoon, the minus was just under eleven percent, but that doesn’t change a fundamental assumption: Who at a price of 45 dollars (that’s how much the Twitter share was worth on Thursday evening) completely or partially from his Twitter engagement, apparently has no confidence in Elon Musk’s announcements. Even if he added two hours after the first announcement that he was still interested in buying it. He wanted to pay more than $54 to Twitter shareholders who would sell him their shares. But does he actually still do it? Or does the multi-billionaire want to push the price down in the end? Would he even be willing to pay a billion dollar fine just to get out of the deal?

Regardless of the fact that there should also be enough co-owners who sell their shares in Musk, there are apparently some doubts about the financing concept of the richest man in the world. He originally wanted to raise 25 billion euros from the banks and shoulder the rest of the 44 billion dollar purchase with his own shares. Twelve billion dollars of credit should be secured with shares in the electric car manufacturer Tesla. The problem: Tesla stock has fallen 28 percent from the day Musk announced his acquisition plans through Thursday afternoon, plummeting from $935 to $675. Means: Musk would have to spend more Tesla shares than planned for collateral. By the way, on Friday the price went up again by seven percent. Perhaps some are actually buying in anticipation of Musk abandoning his Twitter plans.

But he is still looking for other investors. That would explain the temporary stop better than the declared waiting for new calculations on fake accounts that are used for spam messages and that Musk says he himself wants to see deleted. Whether this really accounts for less than five percent of all accounts or not should make little difference to the business decision. Unless the company’s management admitted at the end of April that it had reported slightly inflated user numbers in recent years, Musk would have been emphatically frightened. But that is also not likely. Whether Twitter should have 350 million, 330 million or 370 million users – everything is hardly more than a sixth of what heavyweights like Facebook, Youtube and Whatsapp have to offer. Twitter is not a mass medium, it is still a playing field, above all, for politicians and other decision-makers, for media professionals and opinion leaders. In addition, the Twitter management’s admission was two weeks ago and is therefore no longer a credible justification for Elon Musk’s sudden hesitation in realizing his plans.

The deal is still only suspended, not stopped. Maybe it still works. And maybe Donald Trump will come back. There are users on Twitter who even suspect that Musk’s comments about the ex-president’s reinstatement could be a goodie so that the Republican could lower taxes on the super-rich a bit after a possible re-election. But that’s probably too far away. And it would be far too banal.