InvestorQ : Why is Elon Musk threatening to walk out of Twitter deal? Do you see the deal falling through?
Katherine Gonsalves made post

Why is Elon Musk threatening to walk out of Twitter deal? Do you see the deal falling through?

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rhea Babu answered.
4 weeks ago
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There is a twist to the most interesting story on Wall Street. Elon Musk has threatened to walk away from the $44 billion bid to buy Twitter. Why is it so? Tesla has accused Twitter of refusing to share information about its spam bot and fake accounts, which has long been a bone of contention. The current market cap of Twitter stands at $30 billion, nearly 35% lower than the amount that Elon Musk. However, it had touched a peak of $60 billion after the deal was announced but has given up 50% since. Now for the Musk story.

Here is where the problems start. Currently, Twitter has about 229 million accounts but Musk has not been able to get the data on how many of these accounts were fake or BOT driven and how many were genuine. The CEO Parag Agarwal has consistently maintained that less than 5% of the 229 million accounts were fakes, but Musk’s own estimates peg the fake accounts at closer to 20-25%. Now Twitter shareholders have even sued Elon Musk for deflating the price and the valuation of the Twitter stock.

Elon Musk had originally agreed to buy Twitter for $54.20 a share in April but since then there has been a public spat between Elon Musk and Parag Agarwal over the number of fake accounts. Sceptics believe that Musk was using loud tactics to force Twitter to reduce the deal price. That is still an open issue but Twitter is not keen on reducing the price of the deal at all. There is no case for Musk to walk away from the deal unless he is willing to pay the hook-up fee of $1 billion. Twitter has been disclosing bot estimates to the US SEC.

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