Alex Bruno
Twitter is presently being subjected to Musk’s old tactic of keeping his adversaries and negotiation partners on their toes. Tesla’s CEO roiled the markets on Friday when he put his purchase of Twitter on “temporary pause,” claiming the need to determine the precise amount of bots or fraudulent accounts among Twitter’s 229 million monetizable daily users in Q1 2022. Despite the fact that Musk declared at the time that he was “dedicated” to the arrangement, the Tesla CEO recently disclosed that he got a call from Twitter’s legal team soon after for allegedly breaking the Non-Disclosure Agreement (NDA).
Musk’s post, in which he disclosed that Twitter’s in-house random selection procedure employed a sample size of 100, triggered the call. Keep in mind that if the transaction falls through, Musk will have to pay $1 billion in breakup costs. This leads us to the root of the problem. Musk’s postponement of the acquisition transaction might be a ruse to renegotiate a cheaper price for Twitter, as we speculated on Friday. Musk’s most recent tweet undoubtedly lends credence to this hypothesis.
In a recent post, Musk suggested that “over 90%” of Twitter’s daily active users may be bots or bogus accounts. Musk used the fact that the most popular tweet on the site earned likes from about 2% of the social media giant’s daily active users to support his argument for such a high number of bots on the platform. Of course, a statistically sound random sampling test with a large enough sample size may readily determine the precise fraction.
As we mentioned in our Friday article, short-seller Hindenburg Research has launched a short position on Twitter, citing the possibility of a renegotiation of the acquisition agreement. Musk’s most recent tweets convey the impression that he is planning for the same outcome.
Of course, if that is Musk’s genuine goal, then it is in his best interests for the Tesla CEO to attempt to drive down the stock price of the social media behemoth. The lower Twitter shares fall, the stronger Musk’s negotiating position becomes. Twitter shares ended at $40.72 on Friday, representing a 25% discount to Musk’s offer price of $54.20 a share for the social media behemoth. Expect this difference to expand as Musk’s negotiation stance strengthens in the coming days.
Source: WCCFTECH
