Explained: How Elon Musk’s Twitter bid may have been a smokescreen to liquidate Tesla stocks- Technology News, Firstpost

Late last week, Elon Musk backed out of his bid to buy Twitter for $44 Billion, blaming the social media platform’s alleged lack of transparency regarding bots on the site. 

While Twitter is now planning to sue Musk and claim the $1 Billion that was set in case either of the parties, Musk or Twitter backed out of the deal, there is a theory floating around that Musk may have just used this takeover bid as a ploy to liquidate some of the Tesla stock he owns, without causing a major dip in its valuation. If that is indeed the case, it would be the most clever business move of the century.

To put things into context, Elon Musk had always planned to use some of his shares of Tesla to fund his purchase of Twitter, and he would use a significant bunch of his Tesla holdings to leverage other financing options. Now, several finance experts and trade analysts are claiming that Musk never intended to buy Twitter and that the entire exercise was just a clever ploy to liquidate a small portion of his holdings.

Josh Wolfe, a co-founder of Lux Capital, tweeted on Friday, after Elon made the announcement, saying, “Entire thing was a clever ruse to SELL + LIQUIDATE $8.5 BILLION of TESLA STOCK (w/plausible excuse for doing it)” He also added, “Honestly think he can ‘land rockets’ but can’t fix ‘bots’?”

Wolfe also explains how Musk would be able to walk away with over $7 Billion, even if he pays Twitter the $1 Billion “breakup fee.”

Henry Blodget, founder and CEO of Insider, retweeted Wolfe, adding that Musk’s 10-year Tesla options were about to expire, “so he had to sell them.”

“The Twitter bid did allow him to do that without his facing questions about why he was selling. And he sold at an excellent price!” Blodget said via tweet.

Musk had put the acquisition deal “temporarily on hold” in May so his team could investigate the number of spam or bot accounts on the social media platform. Twitter estimated that bots accounted for 5% or less of users and provided Musk with internal metrics. But Musk insisted his team hadn’t been provided with enough information to independently analyze the data.

Ever since Elon Musk announced that he was withdrawing his bid to buy Twitter, Tesla’s stock has risen by over 2 per cent, whereas Twitter’s stock fell by 5 per cent.

; if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version='2.0'; n.queue=[];t=b.createElement(e);t.async=!0; t.src=v;s=b.getElementsByTagName(e)[0]; s.parentNode.insertBefore(t,s)}(window,document,'script', 'https://connect.facebook.net/en_US/fbevents.js'); fbq('init', '259288058299626'); fbq('track', 'PageView');

For all the latest Technology News Click Here 

 For the latest news and updates, follow us on Google News

Read original article here

Denial of responsibility! TechNewsBoy.com is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.