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Musk Makes Billions by Walking Away from Twitter Deal  

Elon Musk bitcoin

  • Last Friday, Musk dropped a regulatory filing to walk away from the US$44 billion acquisition of Twitter, with many of the billionaire’s bankers receiving no notice of the move.
  • Whilst this isn’t the first time that Musk has walked back on major deals that have had serious implications on the stock market, the Twitter deal went a lot further than previous runs

Elon Musk has been known to leave his investment bankers hanging on deals and the acquisition of Twitter (-4.98%) likely isn’t the first or the last for the billionaire Tesla owner.

Last Friday, Musk dropped a regulatory filing to walk away from the US$44 billion acquisition of Twitter, with many of the billionaire’s bankers receiving no notice of the move.

Musk’s move to drop the Twitter acquisition was met with a mixture of disappointment and relief from his bankers, and the lucrative fees from the deal, with Goldman Sachs Group (-0.71%) and JPMorgan Chase (-0.31%) set to earn a combined US$133 million once the deal was sealed, now likely to receive a fraction of that amount.

Whilst this isn’t the first time that Musk has walked back on major deals that have had serious implications on the stock market, the Twitter deal went a lot further than previous runs.

In 2018, Musk tweeted about taking electric vehicle maker Tesla, private, sending shares of the firm soaring and was subsequently censured by the U.S. Securities and Exchange Commission, which he entered into a private settlement with.

It’s entirely possible that the entire Twitter acquisition episode could have been a ruse for the mercurial billionaire to have sold some of his Tesla stock, on the pretext of funding his Twitter acquisition.

In April this year, Musk sold US$8.5 billion worth of Tesla (+2.54%) stock at prices ranging from US$822.68 to US$999.13 a share, well above its price last Friday of US$752.29, impeccable if somewhat “convenient” timing.

Considering that Musk so far been able to solve some of the world’s most intractable problems, including cost-efficient spaceflight using reusable rockets and the electrification of vehicles, it would stand to reason social media ought to be a cake walk for the billionaire.

Yet for some reason Musk baulked at the idea, claiming that Twitter was rife with bots, something which early due diligence would have shown up, if true.

Some bankers are still hopeful that the Twitter deal won’t be scotched.

And Musk has been known to make numerous U-turns, deciding on one day that Bitcoin could be accepted payment for Tesla’s vehicles and then changing his mind just as abruptly. 

 

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