Something I think about too much: Elon Musk walked away from an offer to join Twitter’s board when they wanted to do a background check. A short time after he walked away from that deal, he made another deal: the purchase of Twitter for $44 billion. Musk and Twitter’s board signed off on the deal and Musk agreed to the purchase as-is, without any due diligence. He’ll have to shell out $1 billion if the deal doesn’t go through, and that’s just the contractual “break up clause.” He’ll also be sued into oblivion by Twitter’s shareholders. So, obviously, Musk has been trying to weasel his way out of the deal for the better part of two months. It’s been hilarious to watch as he fumbles around, whining about spam and bots while Twitter mostly sits back and mutters “caveat emptor.” It’s actually been a good month since we heard anything substantive from this broken deal. Now WaPo has an update:
Elon Musk’s deal to buy Twitter is in serious jeopardy, three people familiar with the matter say, as Musk’s camp concluded that Twitter’s figures on spam accounts are not verifiable. Musk’s team has stopped engaging in certain discussions around funding for the $44 billion deal, including with a party named as a likely backer, one of the people said. The people spoke on the condition of anonymity because of the sensitivity of the ongoing discussions.
Talks with investors have cooled in recent weeks as Musk’s camp has raised doubts about the recent data “fire hose” — a trove of data sold to corporate customers — they received from Twitter. Musk’s team’s doubts about the spam figures signal they believe they do not have enough information to evaluate Twitter’s prospects as a business, the people said.
Now that Musk’s team has concluded Twitter’s figures on spam accounts are not verifiable, one of the people said, it is expected to take potentially drastic action. The person said it was likely a change in direction from Musk’s team would come soon, though they did not say exactly what they thought that change would be.
If Musk pulls out of the deal, it will potentially trigger a massive legal battle. The terms of the deal say Musk must pay $1 billion to break up the deal, but legal experts have said that Twitter could try to force Musk to go through with the purchase if his reason for scuttling it is not based on the company’s fundamental business. When he made his offer in April, Musk waived his right to take a deeper look at Twitter’s finances. Twitter spokesperson Trenton Kennedy declined to comment. Musk did not immediately respond to a request for comment.
What an idiot. Think about how poorly Musk has played this from start to finish. He could have had a seat on Twitter’s board, using that position to dismantle the company and/or learn more about his new Big Concern, spam. Instead, he made this big show of making an outlandish bid to buy Twitter, after which it’s revealed that he’s too broke-ass to actually buy it outright and keep Tesla, after which all of that background check information that he was trying to hide has come out anyway. We know about the extra kids, the sexual harassment payoffs, the Ponzi schemes and the bad business practices. I f–king love that this has blown up in his stupid, arrogant face.
the reason that elon musk can’t get out of the deal over the bots thing is not that he “waived due diligence.” it’s that he SIGNED A BINDING AGREEMENT TO BUY TWITTER, and that agreement does not have any outs for “i think there are too many bots.”
— Matt Levine (@matt_levine) July 7, 2022
Photos courtesy of Backgrid, Avalon Red.