Musk/Twitter/Tesla: a bad case of cold feet
Tesla’s boss Elon Musk has “a super bad feeling” about the economy, according to an internal email sent to executives, said Julien Ponthus on Reuters. This has prompted him to contemplate cutting 10% of the electric carmaker’s staff and put a freeze on hiring. Now he’s turning up the heat on Twitter, too, with a threat to scrap his $44bn deal to buy the social media platform, because of what he calls “a clear material breach” of the agreement terms. He claims that Twitter has failed to provide him with information on its problem with “bots” – spam and fake accounts.
This looks very much like a “manufactured” quarrel to get Musk off the hook, said Nils Pratley in The Guardian. If he was truly as worried as he claims about Twitter’s “bots”, he could have demanded detailed information before he signed the deal. Perhaps he “just enjoys making mischief”; but it’s more likely that “the slide in tech valuations” has made his $54.20 per share deal “look far too generous”. The tactic “seems designed to weary Twitter’s board to a point at which it either agrees to cut the takeover price or… call the whole thing off”. For the moment, the board is holding firm. But it’s not a risk-free option. “A court battle with the untameable and unpredictable Musk would be a serious distraction for years.”
It may be, said Lex in the Financial Times, that the banks providing $13bn in debt financing for the Twitter deal “are equally nervous”. Tesla investors certainly are, said Alistair Osborne in The Times. “The damage has been extraordinary.” When Musk first disclosed his Twitter adventure in early April, shares stood at $1,145; they’re currently trading at around $714. Musk can blame the economy, if he likes, for his “super bad feeling”. But there’s a cause closer to home. “He could also look in the mirror.”