If Elon Musk's bid for Twitter was dramatic, there was more drama to come in the months that followed. After stalking Twitter online for several weeks, dropping ominous hints about an impending hostile takeover bid, Musk did offer a $44 billion offer for Twitter, a bid that the microblogging site's board went on to accept.
However, Musk has now walked away from the offer, though the outcome of the ensuing legal wrangle is not clear as of now. Musk is a maverick tech visionary and billionaire, and his ways have not been predictable all along. But that alone does not explain away the mysteries buried in the deal and its death.
What is the Real Reason?
What made Musk make the offer and then eventually kill it? What is the real reason behind the withdrawal of the deal? Is Musk right in saying that the dispute over fake accounts the real thing that marred the deal?
There is wide speculation on all these points.
According to Fortune, there are some experts who believe that Musk used the Twitter deal to sell a massive chunk of stock he owns in Tesla. They argue that the fake accounts in Twitter were not the real reason Musk walked away from the deal. They aver that a visionary tech genius who is leading some of the most complex scientific and space enterprises could have easily fixed the bot issue plaguing Twitter.
"Entire thing was a clever ruse to SELL + LIQUIDATE $8.5 BILLION of TESLA STOCK (w/plausible excuse for doing it) ... Honestly think he can 'land rockets' but can't fix 'bots'?" said Josh Wolfe, co-founder of Lux Capital, according to Fortune.
The influencer explained that the sale of Tesla stock at that point had made Musk richer by at least $7 billion even if one takes into account the possibility of him paying $1 to Twitter as a breakup fee.
Sold Tesla Shares at Excellent Price?
Henry Blodget, founder and CEO of Insider, added that the Twitter deal allowed Musk to sell his shares without facing questions and scrutiny. At that time Musk was involved in open attempts to raise money for the deal, and him selling shares in his flagship company came across as a genuine business proposition. Blodget explains that Musk's 10-year Tesla options were expiring and the Twitter deal allowed to go ahead with the sale without facing questions.
"The Twitter bid did allow him to do that without his facing questions about why he was selling. And he sold at an excellent price!" Blodget tweeted.
At the same time, this reasoning has been questioned by another segment of observers. They point out that if the options were soon to expire, would Musk need the ruse of Twitter offer for executing the share sale.
On Friday, Musk said he was walking away from the $44 billion offer made a few months ago. Twitter vowed to mount a legal fight against Musk for withdrawing the takeover offer, challenging Musk's charge that the microblogging giant had misrepresented the number of fake accounts.
Twitter has denied the charges made by Musk from the beginning and it stands by its metrics. In its initial response to the development Twitter board has vowed to purse a legal challenge against Musk, forcing him to stand by the offer.
However, though legal experts believe that the Twitter board's case against Musk is strong, the company might actually prefer a negotiated settlement to a prolonged legal wrangle,
Reuters cited experts saying that Twitter could opt for a renegotiation or settlement. Under the rules in Delaware, where the fight will play out, it is not easy for acquirers to walk away from offers without suffering significant financial losses. However, corporate law experts underline the fact that companies still like to have a renegotiated deal at a lower price instead of a troublesome court battle. Another option is for the companies to accept financial compensation.