While chattering classes are paying attention to Elon Musk’s love life (I still can’t figure out whether or not he had that alleged affair or why I should care), the Tesla electric-vehicle king is in developing a new A busy and risky strategy to buy Twitter – but at a much lower cost, bankers with knowledge of the matter told The Post.
I know it’s conventional wisdom that he wants to back out of the deal; He says Twitter is hiding football on fake accounts and the number of those annoying bots. But as we mentioned earlier, bankers who know him doubt that he really wants to leave it.
He says he just wants to pay Tesla less after Twitter’s share price drops along with the rest of the tech sector, which serves as Musk’s bargain currency (he owns 175 million shares; you do math).
Now they say there’s way more to Musk’s Twitter-deal madness, even though he’s still rolling the dice in a way that could be disastrous for him.
Bankers say the game plan Musk is employing is a war – playing a long game and knocking the enemy down until they surrender. You essentially kill more of them, until they can surrender on the battlefield.
Musk’s war with Twitter involved a battlefield known as the Delaware Chancery Court, the well-known venue for settling corporate disputes. A trial is set to begin on October 17 over a lawsuit by Twitter for forcing Musk to take advantage of a $44 billion initial offer to buy the company.
These bankers say Musk knows that Chancery judges don’t take pity on wealthy business types who sign documents saying one thing, but then try to switch words when their-financial circumstances suddenly change. Huh.
You may recall that Musk began grabbing Twitter shares and made his “best and final offer” to buy the company.
In my humble opinion, he couldn’t have been surprised by the fake, as he knew there were some issues. In fact, he said he had plans to get rid of them and turn the ubiquitous social-media site into a successful business. (For all its influence, Twitter barely makes any money.)
Chancery judges have seen all kinds of B.S.ers over the years, and they’re likely to throw Musk and his excuses into the same category.
A court order could force him to pay the full $44 billion ($54.20 per share as opposed to Twitter’s current share price of $41.61), which is an enormous amount of change even for someone as wealthy ($260 billion) as Musk. Is part of.
Bankers say Musk is ready for it. He’s also set to appeal to the Delaware Supreme Court—and that’s where his battle begins. He says the appeal will take about eight months or maybe a year, but with the plethora of uncertainty, Twitter’s business will continue to crumble. Advertisers are already speaking out amid Musk’s comments about bot issues and an impending recession.
Money will be tight, and there are so many rounds of layoffs that any high-tech company can execute to work out the numbers before it starts eating into its infrastructure.
Musk believes Twitter will be pressured by shareholders for a significantly lower price as shares slide to $30 and below, these people say. A lawyer for Musk declined to comment.
it will work? Charles Elson, founding director of the Weinberg Center for Corporate Governance at the University of Delaware and chancery court expert, thinks so.
“The appeals process can take months — possibly six to eight, so it makes sense that Musk could take advantage of that time to negotiate a better deal,” he told Fox Business’s Eleanor Terrett.
His prediction: Musk cuts the price by about 5% and Twitter agrees to a new deal. Or maybe Twitter wins over the appeal, costing Musk the full $44 billion. As Tesla stock continues to tumble amid recession fears, Musk will have two dwindling assets.
Memo to Alone: The End of War is risky.
Pellosis is a low$$. Take
It looks like Paul Pelosi finally lost money in his favorite pastime: trading stocks. Perhaps that’s why his wife, Nancy, the powerful speaker of the House of Representatives, finally backs new legislation that would ban lawmakers and their spouses from trading stocks using their apparent information edge.
As we reported in last week’s column, Big Paul has been killing it in the markets in recent years with a fish trade that seemed time-bound to profit from the law, with the apparent involvement of his wife. He has amassed a considerable fortune for him and Nancy by virtue of his investing acumen. He is worth over $100 million, and the House speaker is one of the wealthiest people in Congress.
Last week, Paul finally took a loss on a tech trade for reasons that made no financial sense because the stock’s shares will likely continue to rise with new legislation — being pushed by his wife, of course — corporate. Giving chipmakers billions of dollars in welfare.
Given all the bad publicity surrounding his business, Paul may be ashamed to sell at a loss. Likewise, Nancy might be ashamed to support a bill that would end this morally loaded gravy train she’s feasted on for years.