For months after the initial bid to acquire social media giant Twitter was submitted by Elon Musk, the deal is still pending as several roadblocks are currently holding the transactions backward.
While TWTR is trading at $37.78 and the company’s capitalization is now pegged at $28.87 billion at the time of writing, down from the agreed $44 billion as tech stocks have taken a beating over the past couple of months.
Elon Musk is at a significant loggerhead with Twitter Inc (NYSE: TWTR) management over the release of spam accounts on the Twitter platform. While the social media giant estimates these fake accounts to be around 5%, Elon Musk is doubtful of these figures and has asked for access to data to conduct his own personal verifications.
With the release of these data arguably stalling, He has threatened to walk away from the deal, a move that can incur a $1 billion breakup fee and unprecedented lawsuits. At a recent event organized by Bloomberg, Musk outlined the three key hurdles that must be surpassed before the Twitter deal can be completed
Elon Musk and the Conditions to Close Twitter Deal
One of the primary concerns which is the bot and spam account counts must be ascertained as this is very important according to the Tesla Inc (NASDAQ: TSLA) and SpaceX CEO.
“We’re still awaiting a resolution on that matter, and that is a very significant matter,” he said.
Besides this, the issue of funding still remains quite ambiguous despite Elon Musk promising to finance the deal with as much as $33.5 billion in cash as part of the payment for the social media giant. The free speech narrative Elon Musk is championing has garnered a lot of interest across the board as investors like Changpeng Zhao of Binance and Larry Ellison, Oracle Co-Founder amongst others have injected about $7.1 billion to help complete the deal.
Musk’s portion of the proposed fund is meant to be secured via a bank loan with Tesla shares pledged as collateral. While the plans to get the balance funds through this proposed bank loan, how this will play out remains unknown to all parties involved.
Bret Taylor, Twitter’s independent Board Chairman has affirmed that the plans to complete the deal with Elon Musk are still very much in the interests of the board members, however, shareholders are expected to vote either to favor the completion of the deal or not with the votes slated for late July or early August.
There is no guarantee that these investors will back the takeover, and that some have sued both Musk and the company for how the deal is being handled has sent a pretty gloomy outlook.
“Will the debt portion of the round come together? And then will the shareholders vote in favor?” Musk said Tuesday, adding that “These – along with the issue of fake accounts – are “the three things that need to be resolved before the transaction can complete.”
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