5 reasons that could lead to the collapse of the Elon Musk deal to buy Twitter



Elon Musk’s $44 billion purchase of Twitter is accelerating, but the risk of its collapse remains.

at her article Which was published by the American newspaper “Washington post”, writer Rachel Lerman said that the CEO of Tesla and SpaceX expressed his desire to buy Twitter to enhance freedom of expression on the platform, and his offer raised Mixed reactions. Musk had planned to fund the deal by taking loans from banks in return for providing about $21 billion in his own equity.

The following are the risk factors that still exist:

Twitter share

Twitter’s share price fell last Wednesday, and closed at $48.64, a number much lower than the $54.20 purchase price offered by Musk. According to some analysts, this made some investors fear that the deal might fail. Twitter shareholders will also vote on the deal, so Musk needs the support of several of them.

Tesla Arrow

Musk plans to secure $21 billion of the deal value from his own stock, part of which is his stake in electric car company Tesla, as collateral for the deal. But Tesla’s share price fell sharply the day after Musk announced the acquisition of Twitter, with a loss estimated at $100 billion, which in turn damaged Musk’s fortune. The financing of the transaction could be jeopardized if the share price falls further.

Investors are concerned about Musk’s willingness to risk sacrificing the price of Tesla’s stock, which has performed very well, in order to buy Twitter shares that have underperformed relatively poorly.

mask tweets

Musk, who has more than 88 million followers on Twitter, is known for posting controversial and market-influencing tweets that got him into trouble with the Securities and Exchange Commission.


One of the terms of the deal allows Musk to post tweets about the acquisition deal unless it includes a disparagement of the company or any of its representatives. According to a person familiar with the deal who spoke on the condition of anonymity, this clause is activated only when criticism revolves around the deal, which means that negative comments about Twitter that are not related to the deal do not constitute a violation of these terms. Elon Musk has tweeted about the company several times since the deal was completed, expressing his support for private message encryption, saying, “Let’s make Twitter better.”

But some of his tweets have alarmed Twitter employees and researchers who study bullying on social media. Musk also criticized two Twitter executives, and some users went as far as calling for the removal of a company executive or racist labels against her.

Musk seems eager to buy Twitter and has put in place a backup plan in case his first offer fails to finance the (European) deal

Sharing relatively low division fee

The terms of the deal include a $1 billion termination fee that Musk or Twitter will have to pay together if both parties withdraw from the deal for specific reasons. Analysts say that the fee, which is normal for a deal of this size, is not large enough to prevent either party from withdrawing.

As part of the terms of the deal, Twitter cannot search for other buyers but can listen to offers it may receive. And if the company gets a better offer, they may have to pay a transaction fee.

Mask can change his mind

Musk is excited about buying Twitter — he wants a big stake in the company, has considered joining its board, putting together a back-up plan in case his first bid fails and determining financing for the deal.

He’s succeeded in many projects — making electric cars, sending rockets into space and helping the Ukrainian government connect to Starlink during the war — but the billionaire didn’t always follow through on his grand plans or have double results, when he tweeted that he had secured funding to make Tesla private at a price At $420 a share, the SEC later fined him $20 million.



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