in one series of tweets sent on Friday, Twitter CEO Parag Agrawal revealed that Elon Musk’s deal to buy the company could fall through.
A lot has happened in the past few weeks. I’ve been focused on the company and haven’t said much publicly in that time, but I will now.
– Parag Agrawal (@paraga) May 13, 2022
Prepare for all scenarios
″While I expect the deal to go through, we need to be prepared for all scenarios and always do what’s right for Twitter,” Agarwal said. “I’m responsible for leading and running Twitter, and our job is to build a stronger Twitter every day.”
Musk already had that tweeted earlier on Friday that the deal was on hold until he could determine how many fake accounts, such as spam bots, were present on the platform. The move caused the stock to plummet nearly 10 percent.
But exiting the deal could prove more complicated than previously thought. Musk may have to pay Twitter a $1 billion redemption fee and risk a breach of contract lawsuit that could cost him much more.
This is because in this case there is no external reason why the deal cannot be completed, such as: B. Government intermediation, third party funding concerns or fraud. Just these three reasons would allow Musk to go out of business with no liability to Twitter.
A possible strike
So why is he claiming he could cancel the deal?
It could be to get Twitter to lower its price. “This is likely a negotiation tactic on behalf of Elon,” Toni Sacconaghi, senior research analyst at Bernstein, said on Friday CNBC‘s “Squawk Box”. “The market has collapsed. He’s probably using the disguise of real active users as a negotiation ploy.”
If he goes ahead with the cancellation of the deal, he will inevitably suffer deep reputational damage that would make companies unsafe to sell to him and even do business with him in the future. Well, that’s an option that doesn’t sit well with the billionaire entrepreneur!