In this photo illustration, Elon Musk’s Twitter account is seen on a smartphone screen and the Twitter logo in the background.
Pavlo Gonchar | Lightrocket | Getty pictures
Elon Musk says there are three main obstacles to overcome before he can complete the purchase of Twitter.
Musk seeks to buy Twitter for $ 44 billion, a mega-acquisition with huge implications for social media – not least given the Tesla and SpaceX boss’s controversial stance on content moderation and freedom of expression.
But the fate of the deal has become more uncertain in recent weeks after Musk threatened to walk away, citing concerns over the number of fake accounts on the platform. The billionaire could face a $ 1 billion dissolution fee and possibly even a lawsuit if he were to leave the deal.
In a speech at an event hosted by Bloomberg on Tuesday, Musk said there were a number of “unresolved issues” that need to be resolved before he can proceed with the takeover.
Musk has made no secret of his concerns over the number of fake accounts on Twitter. Attempts to manipulate social media platforms with fake accounts and robots are not exactly new, but Musk says he wants more clarity from Twitter about how many of the users are real.
Public disclosures from Twitter place the number of fake accounts or spam accounts at less than 5% of the daily active users who can make money. Musk is questionable. On Tuesday, he said that “probably not most people’s experience when using Twitter”.
“We are still waiting for a solution to that issue, and it is a very important issue,” he said.
Last week, Bret Taylor, Twitter’s independent chairman, said the company’s management remained “committed to the transaction under the agreed terms.”
The other major roadblock for the Twitter transaction, according to Musk, is the portion of the debt required to fund it.
Musk in May committed to pay $ 33.5 billion in cash for the company. He has also received $ 7.1 billion in equity financing commitments from investors, including Oracle co-founder Larry Ellison and the crypto exchange Binance.
Musk says that the rest of the financing will come in the form of bank loans, but exactly how this will play out is still uncertain. Despite being the richest man in the world, much of Musk’s wealth is tied up in Tesla shares. He has sold and pledged billions in Tesla shares as security for the loans.
3. Shareholder approval
The latest obstacle for Musk to obtain the acquisition is approval from Twitter’s shareholders. Investors are expected to vote on the agreement in late July or early August.
Whether Musk will receive enough shareholder support for the acquisition is still unclear. Last month, some Twitter shareholders sued Musk and the company themselves for the chaotic handling of the process.
“Will the debt part of the round come together? And will the shareholders then vote in favor?” said Musk Tuesday.
These – along with the problem of counterfeit accounts – are “the three things that need to be resolved before the transaction can be completed,” he added.