They sign merger agreements so they can do deals. Here's what Donna Hitscherich, a professor at Columbia Business School, told me.ĭONNA HITSCHERICH: Generally speaking, people don't sign merger agreements so they can walk away from them. So some people think it's much more likely Musk may be using this issue as leverage to renegotiate his offer price, basically to pay less.Īnd this is not the way that big corporate deals typically play out.

And, you know, the combination of the two, I think, would naturally kind of give an individual like Elon Musk cold feet.ĬHANG: Cold feet - but can Musk just walk away from this deal easy peasy?īOND: Well, he would have to pay a $1 billion breakup fee to Twitter with, you know, very few exceptions.īOND: And experts tell me that even if he did that, he could still be sued for breach of contract, be on the hook for even more money. Here's what Angelo Zino, an analyst at CFRA Research, told me.ĪNGELO ZINO: With Tesla's stock kind of petering here in recent weeks, I think that's also had a impact on Musk's, you know, personal wealth. But Tesla's stock price has dropped by almost a third since the Twitter deal was announced.Īnd on top of that, there has been this wider sell-off in the market that's hit tech stocks especially hard. He said he's going to do that by selling and borrowing against some of his shares in Tesla, the electric car company where he's CEO and the source of much of his wealth. You know, Musk has committed to paying $21 billion out of this purchase price. And that suggests investors are worried that Musk is maybe having second thoughts about this deal.īOND: Well, look this purchase is getting more expensive and risky. But look, Ailsa Twitter's shares tanked today on this news. So does this actually mean Musk might not buy Twitter after all?īOND: Well, in a follow-up tweet, he said he is still committed to the deal. And so that's why he's putting this deal on hold.ĬHANG: OK. And so now he's saying he wants to look into these numbers himself.

But Musk has said that getting rid of spam and automated bot accounts is a priority for how he wants to change Twitter. In its latest filing, Twitter says less than 5% of accounts are fake. And, you know, this is a number that matters because Twitter's business is selling ads, and advertisers don't want to pay for ads that aren't being seen by real people. Now, Twitter regularly discloses how many fake accounts it has.

BOND: Well, in a tweet, of course, Musk said he has questions about just how many Twitter accounts are fake or tweeting spam.

The Merger Mogul by Donna Every