Twitter’s board unanimously supports the sale of the company to Elon Musk

Elon Musk’s offer on Twitter continues to cover stages. The board of the company has communicated this Tuesday that it unanimously accepts the offer and that it recommends that the shareholders approve it at a future meeting, as reported to the United States Securities and Exchange Commission (the SEC). The board of directors, unanimously, “has determined that the merger agreement is advisable and that the merger and the other transactions contemplated in the merger agreement are fair, advisable and in the best interest of Twitter and its shareholders”, has indicated in an extensive document before the regulator.

Musk, meanwhile, continues without convincing the market that it will actually buy Twitter at the promised price. The shares are trading well below his $54.2 offer and he continues to fuel uncertainty. This Tuesday, at an event organized by Bloomberg in Doha, the founding tycoon of Tesla and SpaceX has indicated that there are still three issues to be resolved to close the purchase: false user accounts, financing and approval by shareholders.

The volume of fake user accounts, which are actually bots or automated accounts, is the main issue he has used to cool down an offer made before the crash of the market and, in particular, of technology stocks and which therefore now seems very generous. The richest man in the world, with an estimated fortune of about 200,000 million dollars (about 190,000 million euros) has insisted on Tuesday that he does not trust the company’s data.

“False accounts and spam Twitter says they are 5%, but it is not our experience” he pointed out in Doha. Musk launched his offer without doing a thorough prior review of the company, as is usual in this kind of operation, and it will be difficult for him to use that as an argument to back down. The financier signed a clause by which he would pay 1,000 million dollars if he did not close the purchase, but it is possible that the company could also sue him to enforce the contract by which He promised to pay about 44,000 million dollars to take over the company.

In addition to the fake accounts, which are “still a very significant issue,” according to Musk, the businessman added: “And, of course, there is the question of whether the part of the debt will be met [para financiar la operación] and if the shareholders will vote in favor”. The businessman continues to refuse to take the operation for granted, which fuels speculation that he will try to lower the price or back out.

As for the shareholder vote, there should be little doubt, since the shares are trading 30% below the offer price and voting in favor means big profits for them. As for the debt, Musk has been changing the financial structure of the operation to decouple it from Tesla. Initially, he used the shares of the company in which he is the main shareholder as collateral for part of the financing, something that the market penalized. Then he was reducing that guarantee and finally unlinked both operations. Musk, yes. sold over $8 billion worth of Tesla stock to achieve liquidity with which to buy Twitter. So far this year, Musk’s wealth has shrunk by about $65 billion, mainly due to Tesla’s stock market crash.

Musk has said he doesn’t see any problems for Tesla’s business operations in China, a key market for the automaker, if he buys Twitter. The social network is officially banned in China.

The tycoon has tried to clarify their plans on Tesla’s headcount and employee numbers. He has said that he expects a 10% reduction in the salaried workforce in three months, but that with the growth of hourly workers, in the end, the net cut in the workforce will remain at 3%-3.5%. “We hope to increase our workforce of hourly workers. We have grown very quickly on the salaried side”, he said in the interview in which he answered by teleconference from the United States.

The founder of Tesla and SpaceX has also been asked if he had decided to vote for Trump in the event that he presented himself in the 2024 presidential election. “I am undecided at this time about that election.” Musk showed up last week to endorse Florida Governor Ron DeSantis as a candidate.

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Twitter’s board unanimously supports the sale of the company to Elon Musk