Musk reached an acquisition agreement with Twitter, and experts warned that this step was too big

2022-04-26

Techweb reported on April 26 that on Monday, local time, after Tesla CEO Elon Musk finalized the purchase of twitter, a personal social media platform, for $44 billion, Tesla's share price fell by more than 2% and finally closed at $998.02 per share, down 0.7%. Industry experts said that this sign may indicate that Tesla shareholders are worried about Musk's "spare heart but insufficient strength". Experts also suggest that musk, 50, needs to ensure that he does not "passively manage" every big company under his command. Musk finalized the deal to buy twitter on Monday. It is reported that Musk's representatives and the twitter board of directors talked about the transaction from Sunday to early Monday morning, including the time schedule and various expenses involved in the event that the transaction cannot be completed after signing the agreement. But experts warned that musk might "take too big a step" and worried that he might eventually "slip back into the empty shell of Tesla and SpaceX". Tesla's share price also fell on the same day the deal was announced. Tesla shareholders are not the only ones affected. Digital world acquisition, a special purpose acquisition company that will merge with truth social, a social media company led by former US President trump, also fell 15% on Monday. Dan ives, general manager and senior equity research analyst at investment bank Wade Bush securities, said musk "invested too much personal interest in this game". "From the perspective of Wall Street, Musk's chances of acquiring twitter rose from 5% to 95%, because Wall Street had expected the twitter board to bid for the acquisition company or wait for a second bidder to challenge musk," he said "Once this doesn't happen, twitter must sit down with musk because it is a listed company and has a fiduciary duty to consider Musk's proposal," Ives said But after musk detailed his financing last week, the situation faced by Twitter has changed. At that time, the board of directors had been waiting for the private equity bid from musk, but the bid from musk had never been higher than that from musk. Ives explained that the "poison pill plan" proposed by the twitter board of directors prevented musk from rapidly increasing his shareholding to more than 15%, just to win more time. But the problem is that the White Knight expected by the twitter board never appeared. After all, for private equity investors, they want to buy companies that can generate revenue immediately. But this is not the business model of twitter. The acquisition of Twitter has always been a long-term investment. "As for musk, he has put a lot of energy into the game, and the relevant financing plan will not weaken his control over Tesla or other companies," Ives said "He bought twitter with only 10% of his Tesla shares. In addition, musk has just acquired $25 billion worth of Tesla shares, which are actually used as collateral for the acquisition of twitter." If the deal ultimately succeeds, the real threat to existing companies such as Tesla and SpaceX will distract musk. Mike Rhodes, founder of market consulting firm consultmyapp, added earlier Monday: "there is news that Twitter's board of directors may accept Musk's initial acquisition offer, which is a very dangerous prospect." "Frankly, this will begin to push us into an era when individuals can have such a huge global media network and control the narrative logic." "Having said that, I don't think many people will stop using Twitter," Rhodes said He added that as long as musk can maintain twitter tradition and user activity, it should be no problem from a business perspective. "However, the biggest problem musk will face is that the supervision of the platform will be stronger and stronger." "It is also foreseeable that if the acquisition is successful, we may see a huge change in twitter in the next few weeks and months, because I doubt whether people currently working on twitter will be willing to work for musk," Rhodes said "All these obstacles, although they seem interesting, are frankly beyond Musk's ability and may seriously affect the attractiveness of Twitter to daily users." The last question remains how much more energy musk can devote to managing twitter. Experts believe that Musk's ongoing work in Tesla and SpaceX is an ambitious task, which can be handled not only by "passive management". Many assume that the energy he injected into these companies earlier will disappear in the process of managing twitter. Rhodes said, "analysts may think that Musk's vitality will help twitter, but the same vitality from Tesla and SpaceX will only further destroy twitter. The decline in performance and stock prices of other enterprises of musk may further prove this." "Musk may find that this step is too big. When he can't achieve the goal of twitter, he may just go back to the empty shell of Tesla and SpaceX with his tail between his legs," Rhodes said (Xinhua News Agency)

Edit:Li Ling    Responsible editor:Chen Jie

Source:Net Ease News

Special statement: if the pictures and texts reproduced or quoted on this site infringe your legitimate rights and interests, please contact this site, and this site will correct and delete them in time. For copyright issues and website cooperation, please contact through outlook new era email:lwxsd@liaowanghn.com

Return to list

Recommended Reading Change it

Links

Submission mailbox:lwxsd@liaowanghn.com Tel:020-817896455

粤ICP备19140089号 Copyright © 2019 by www.lwxsd.com.all rights reserved

>