July 8, 2022 • 42 mins
Bloomberg's Caroline Hyde breaks down how Elon Musk terminates the Twitter deal after months of speculation. Plus, a look at the US jobs report.
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Speaker 1 (00:00):
We start with the disclaimer. This episode of Bloomberg Technology
was taped just as the news broke that Elon Musk
is terminating his deal to buy Twitter. From the heart
of where Innovation, money and power CALLI in Silicon Valley
and beyond. This is Bloomberg Technology with Emily Jay. I'm
(00:33):
Caroline Hyde in New York. I'm in for a many
chang and this has Beenenberg Technology. Coming up over the
next hour, Elon Musk's escalating battle with Twitter, the fully
four million on a takeover offer, possibly in Jeopanese plus TSMC,
the world's watches contract chipmaker, reported better than expected Courtney revenue,
signaling that electronics demand is holding up better than investors feared.
(00:54):
And we look at today's jobs report, the US number,
and how the tech sector is faring out in the numbers.
It's especially with many companies laying off employee. We had
to that in but a moment, befess, let's got to
check on these markets. And guys, Katie greyfa with quite
a run for the mastack, quite a run, kind of
a muted end to what had been you know, a
week of games. You look at the SP five hundred
(01:15):
ending down just a hair about a tenth of percent.
Tech of course fared better than AZZAC one hundred, gaining
about a tenth of percent. Your big outperformer was the
chip stocks. You have the Philadelphia Semiconductor's Index posting a
half a percent gain even with two year yields rising
almost nine basis points, just on the nose after that
blockbuster jobs report. We got this moment, but let's stay
(01:36):
on the chip because they were the outperformer today, outperformer
on the week. If you look at the past four
days for the socks index, up six and a half percent.
Most of those games came yesterday. You had Samsung come
out report a bigger than expected jump in revenue. That's
sort of changed the mute mood music for the space
in a really good way. And as you can see,
(01:56):
closing out with some really solid gains for an inte
that has been struggling. And speaking of solid games, let's
end on Bitcoin just for you, Caroline, and had a
pretty good week, best week actually since October. But if
you look year to date, as you can see, barely
made a dent. Bitcoin still down over fifty two percent,
close to fifty year to date, and as you look
(02:19):
at this, you can see that the line went up
a little bit, but again barely a scratch for what's
been a really bad year for bitcoin. That has been Katie,
we thank you, and we've kind of been bracing ourselves
for pretty bad job support as well. If you look
at the anecdotal evidence coming from some of the tech
firms at least, but actually US employee has added way
more jobs in June than forecast, and the unemployment rate
(02:39):
held near a five decade low, signs of both strong
demand tight labor market that will keep the federal officials
pretty much tilted towards another interest rate height to the
tune of fifty or seventy five basis points. Jane's our
class door drives us now to discuss the current labor
market and Dania. Before we dig deep into the nuances
particularly affecting the tech sector, let's talk about broad rush
(03:00):
three two thousand jobs at it. It was good. Yeah,
this is a job market that fundamentally remains healthy. We're
seeing strong job gains and even though there is rain
on the forecast, we still see that skies are clear
for the labor market. Where did we see any weakness
of a tool? My eyes trained for example, into the
(03:22):
participation levels that was a blemish in the report. We
did see labor force participation rate comeback a little bit,
and that was in large part driven by a decrease
for black workers. However, I think that we shouldn't put
too much stock into one month changes, and I do
think that as long as the job market continues to
remain tight, then we should see that labor force participation
(03:43):
rate continue to trend upwards like it's been doing over
the last year. And what keeps it tight there for
Daniel for the meantime, well, we still see that employer
demand is extremely high. There over eleven million job openings,
almost still two job openings for unemployed worker, and so
as long as that relations ship holds, than we should
continue to see more workers being drawn in from off
(04:04):
the sidelines. And yeah, I have to say to that end,
I was confused when you look at the amount of
women in the workforce is still well below where it
was pre pandemic. As you say, black workers, Asian workers
in particular, men not participating in the levels that they
were previously. Is it childcare that's the issue. Is it
lack of good pay benefits? What is it that's holding
(04:26):
people back. Do you think there definitely are some pandemic
related factors, So when we look at childcare and elder care,
which I think is especially important to keep in mind
given the context of one COVID, UH, those care factors
are definitely something that are still holding people out of
the economy. COVID itself is still of course going on,
and that that does prevent some workers from fully engaging.
(04:47):
But I think it's also important to remember just structurally
that because of retirement, because of the aging population, we
should naturally expect the way before participation rate to come
down a little bit um And on top of that,
we also have other factors like immigration, which has been
particularly low over the last few years, holding down some
potential lay before it stains. Daniel. I'm interested in therefore
(05:09):
going sector by sector because what we do continue to
see is kind of a shifting of where we've been spending.
We all want to go and have experiences, we want
to go out, we want to eat. We don't want
to be buying things in quite the degree that we
were before. Now you're seeing that born out in terms
of labor still well. I actually, I think what's really
interesting about today's report was that we saw a very
broad based job gains. So even though there are concerns
that consumer spending is rotating away from goods back to services,
(05:32):
we actually saw healthy job gains in retail around about
fifteen thousand jobs added after a job bosses last month,
and so that's still an area of strength where we
are still seeing job gains despite some of these anecdotes
that we've been hearing from companies from earning calls of
weakness and retail center. Well, I mean, let's talk about
some of the anecdotal evidence, because it's not just been
(05:53):
in retail, it's been in real estate, particularly technology driven
real estate. We've seen the likes of Game Stop saying
that the letting go of workers. I mean, I know
these are very tiny pools of labor. But then you
have a headline that comes from the information that says
Oracle is discussing laying off thousands of workers as they
look to cut you know, about a billion dollars in
terms of costs. Are we going to brace ourselves for that?
(06:15):
Daniel Well, I think today's jobs report is actually a
little bit of a surprise because we actually saw information
at twenty five thousand jobs, which was well above what
you might expect given we've heard all these anecdotes, these
prominent anecdotes of the layoffs, and I think what we
might be seeing is that yes, there are prominent laoffs,
but they might not be widespread quite yet, or at
the very least many workers who are being laid off
(06:36):
are able to get up back on their feet pretty
quickly and find other roles. Certainly, what we've been hearing
anecdotally is that maybe candidates have two job offers as
opposed to five job offers on the table. But the
fact is is that they are still finding jobs, they
are still being hired, and what about the wages that
they're seeking, Daniel, I mean, what was interesting is probably
music to the federal reserves here is the wage inflation
(07:00):
is actually being pretty suppressed. At the moment. Wage inflation
is slowing, and I think that that is a result
of the slowing labor market overall, because in that example
I gave, if somebody has five job offers on the table,
then certainly they have a lot more leverage than somebody
who only has two or somebody who only has one.
In all of those cases, that person is probably getting
a new job, but their wage growth potential is very
(07:22):
different in eutra of those scenarios. Daniel Chow, thank you
so much. From Glastore. Of course, senior economists, they're talking
all about some of them numbers and nuances in the numbers,
particularly around the tech sector. We thank him. We start
with the disclaimer. This episode of Bloomberg Technology was taped
just as the news broke that Elon Musk is terminating
(07:43):
his deal to buy Twitter. Well, let's check in on
where the big deal is or isn't going. Of course,
we're talking about elo Musk's escalating battle of the boats
with Twitter. It's possibly threatened to walk away from that
forty four billion dollar takeover. Offers Kurt Wagner, as always,
(08:05):
is all over the story and he joins us, now,
so I mean, is it about bots? I don't think
it's actually about bots. I think, as we've been talking
for a couple of weeks now, Caroline, I think this
is probably about Ellen's hope of renegotiating this deal. Right,
the market has changed dramatically since he agreed to buy
Twitter for fifty four dollars and twenty cents per chair
(08:26):
in late April. I imagine if he had waited even
just a month, he probably could have gotten a company
for a much lower price. And I get the sense
that he's using this bod issue to try and you know,
force a change there. Thus far, Twitter has said again
and again we are holding him accountable for the price
originally talked of. But realistically this is heading for the courts,
(08:47):
right if if indeed he does walk away. It feels
that way because as you point out, Twitter really, I
guess has control here in the sense that he has
agreed to buy the company for this price, right he
cannot simply walk a way without some type of illegal
battle on Twitter seems to be saying that they're willing
to do that. Now. I don't know how beneficial that
is to Twitter to go spend a lot of time
(09:09):
and money fighting him in port. Maybe they would, you know,
come to some type of settlement or agreement to lower
the price without having to get there. But you know,
it's in Twitter's best interest here to get the best
deal for the company. And right now, that's fifty four
dollars and twenty cents to share that he offered back
in April. Suddenly and overall, do you think at some
valley we're inspecting in a mosque to arrive. Of course
(09:32):
Alan and Co is advising we understand on the deal.
So I mean this sort of the debate is going
to come up. It's going to be lifted at some point, right. Yeah.
The question is he going to be um sharing any
new information? And I think he last kind of spoke
publicly at the towards the end of June maybe June,
and he really just kind of said stuff that he'd
already been saying before. And then there was a report
(09:53):
yesterday he probably saw from the Washington Post that that
he's unhappy still with these bought figures and what Twitter
is putting out on the boat front. So it may
just be re reiterating the kinds of things he's already
been saying. Of course, anything he says new would be
super significant, because I feel like it's been a lot
of the same stuff from both sides now for a
couple of weeks. What's the one thing you're looking for
on this stale there fall. I guess I want to
(10:15):
see if he's actually willing to walk away, right, I mean,
he's sort of threatened it. Um. I'd say two or
even three times. Now, is he really willing to say
I wish I hadn't done this deal and I'm going
to force Twitter's hand to sue me. Now, of course
that's that's kind of like saying I'm most looking forward
to the you know, the big fight scene at the
(10:35):
end of the movie. Of course everyone is. But I
do really think that that's the main hang up here,
you know, is is he really going to do what
he seems to be threatening to do. Tell us a
little bit about how Twitter is sparing in all of this.
It's been a tough It's been a tough go if
you're an employee of Twitter for the last few months.
Not only is this deal kind of hovering over everything,
kind of creates a little bit of awkwardness around you know,
(10:57):
what should we focus on? What should we build? Um
But they have said they're going to do cost cuts,
They did hiring freeze, they even rescinded some job operas,
and then there was news yesterday that that they actually
laid off a hundred people. It's a very small percentage
of the overall workforce, but you get the idea that
things just aren't really moving in the growth direction for
them right now, and when you add that on top
(11:18):
of the fact that they're waiting for this deal to
possibly close but possibly not. I just think it creates
a really awkward situation if you're an employee at the
company today and how's it thus far in any way?
You know, sometimes bad news is well, all PR is good.
PR hasn't made people turned to the social media platform?
Have people re engaged with it been previously before? Because
(11:39):
it's been in the news cycle so much, you know,
it's it's a good question. We'll actually probably find out
because the second quarter just ended. Of course, Now last
time they didn't do a full earnings, they didn't do
a call. They just kind of released kind of a
bare bones press release with some numbers. But it'll be
interesting to see if the user growth is still there.
But you know, is this driving people to service? Like
a little skeptical only because a lot of things that
(12:01):
drive people to Twitter are major news events, um, you know,
like an election for example. I'm not sure if the
idea of there being an acquisition is the kind of
news event that's going to bring people to the service.
Just stick with us for a moment, because we've got
a thirteen d as we like to get just on
a Friday when everyone's going home. But we are getting
some sort of undated d coming from Elon Musk of
(12:23):
course regarding his bid for Twitter. And understandably this is
a We're going to have to read through it in
real time overall, but it seems to be once again
updating us previously we've had sort of how much of
the deal has basically got backing from from private sources
as we understand, And and amend's the schedule thirteen D
(12:45):
initially filed by Elon Musk with the SEC on April
the five. With respect to the offer, it says amended
on the eleventh or fourteenth and twenty one seven. I mean,
it goes on to say all the other times that
it's been amended overall, but it looks as though that
they are amending adding the following the information that send
a letter to Twitter formally notifying Twitter that the reporting
(13:06):
person is terminating their Murger agreement. Kurt. The foregoing description
and the reporting person's letter is qualified in its entirety
by reference to the full text of the letter, a
copy of which is attached here to an exhibit p
and incorporated here in for reference. The letter. Therefore, I'm
going to be opening up. This is real time reporting
on Bloomberg as well at the moment. So it does
(13:27):
seem as though, you know, MASKU has filed an amended
and as I've been saying, it looks as though they
are saying that they are terminating their murder agreements. So
saying on July, what do you make of it? I mean,
you're hearing me really out live on on air at
the moment, and we're going to be rushing for every
single reporter that's currently in the building. But do tell
(13:48):
us as to whether or not this could well have
been expected overall? They say, this is actually a letter
that's dated to Twitter Inc. MS Gaddin says, we refer
to the agreement in section six point four. They talk
about the business for any reasonable business purpose related to
the consummation of the transaction. Twitter has not complied with
contractual obligations. It says, for nearly two months, Mr Musk
(14:10):
has sought the data and face information necessary to make
an independent assessment of the prevalence of fake or spam
accounts on Twitter's platform. This information is fundamental to Twitter's
business and financial performance, and he says, thus for thus
far necessary, they say, and it's necessary to consummate the transaction.
So it looks as though Mr Musk has decided that, look,
(14:31):
we can't do it because we haven't got the right
amount of information on bots. Do you see my face here?
This is the base of someone who's learned, in who's learning.
You know that the last three months of work and
reporting that I've done is just kind of the tip
of the iceberg here. It sounds like we have more
to go. But am I surprised, not only because we've
(14:52):
seen this move in this direction, right, We were just
talking about that that they haven't been able to agree
on this, and that you know, Elon seems very focused
on reducing the cost of this deal. I will say
I didn't expect or don't did not expect him to
walk away from something entirely. Again, I thought that he
would try to renegotiate. But you know, we need to
(15:13):
go look at this further and figure out exactly what
he's trying to do here. And maybe this is a
first step towards a renegotiation. Right, but it certainly feels like, um,
this thing that has been boiling for now a few
weeks clearly is reaching the boiling point. Right. It says,
of course, his financial advisors and Morgan Stanley have been
requesting critical information from Twitter as far back as May ninth.
(15:36):
How much have the bank has been involved in all
of this? How much has you know, Musk had a
lot of a lot of help and backers from elsewhere. Yeah,
I mean he's had a whole lot of advisors throughout
this whole process, right, I mean, these things are not
It's not just Elon Musk and Paragua from Twitter sitting
around hashing us out right. There are entire teams of
people that are that are passing information, that have been
(15:56):
in contact daily about this kind of stuff. I think
the debate eight has been what is Twitter giving, uh,
Elen and what is is Elon demanding? I think in
this case, you know, Twitter has said, hey, we're gonna
give you the fire hose of tweets. We're gonna give
you every public tweet on the service. Um and Ellen, clearly,
as you just read, is saying that's not sufficient for
for calculating what I need to calculate, which is the
(16:19):
percentage of box. And I think the real issue here
is that there they just don't see eye to eye
on this body issue, and clearly that's big enough for
him to pull this offer. But again, it feels like
we've been building this for some time. I have to
imagine he had a little buyer's remorse, given that he
made his bid in April and what we've seen, what
the market has been doing the last few months since then,
(16:40):
all of this makes it feel to me that I
reiterate the same sort of question before. But this is
destined for the courts, right, I think so? Right, because
we as we again we were just talking about Twitter
has said repeatedly we planned to enforce the merger agreement. Right,
they have come to an agreement. So even him saying, hey,
I'm pulling out from this thing Twitter, my understanding is
(17:00):
that they legally can try and force him to buy
the company for the price that he agreed to. So
I don't know what him. Again, need to look closer
at the filing. I learned about it just as you
were reading it to me on on air here. But
I do think that this feels like it's headed for
a court. Just remind me of the break up fee. Yes,
(17:20):
so there is a one billion dollar break up fee,
but it's not as simple as Ellen just simply, you know,
paying a billion dollars and walking away. There has to
be other elements of the deal that kind of fall apart,
and then he would pay that as a penalty. Again,
it's not a fee that you can pay just because
you feel like you wish you'd got a better deal. Cut.
I can't say what would do without you. Thank you
for being there in real time on Telly to be
(17:42):
able to read through filing with me. We thank you
so much. Kut whacking. So as we say, you know
Musk is terminating his Twitter merger agreement, we understand a
new thirteen D being filed joyfully on a Friday afternoon,
just everyone wants to head out for a well deserved rest.
He says that the Twitter has failed to provide essential
information and hasn't complied with contractual obligations. All of this,
(18:03):
of course regarding those all important bots. He says, shares
of Twitter sinking and after hours join us a more Blomberg.
We start with the disclaimer. This episode of Bloomberg Technology
was taped just as the news broke that Elon Musk
is terminating his deal to bout Twitter. Let's get back
(18:32):
to the breaking news. Twitter shares falling after hours after
Elon Musk has filed a thirteen D amended thirteen D
saying that he wants to be backing out of the
offer to be buying Twitter for billion dollars. He's terminating
the merger agreements, saying it's failed to provide essential information
and they sometimes ignored requests for information, and pleased to
(18:53):
say that Alex Brinka is joining us. Now you are
meant to be talking about another social media platform, and
we're very pleased that you're going to take some questions
on this new breaking news of Cools being dumped on
a Friday afternoon annex. I'm really wonderful to have you
back on with me. It's been a long time since
we've spoken. Talk to us about what you're making of
this particular move. We'll sort of saw it coming, Yeah,
(19:16):
And I was looking at this letter here and you'll
excuse me having a peek at my phone because it
just hit the wire. Something that I think is super interesting.
Um in this letter Elon Musk and the filing is
basically trying to invoke, um, some of those requirements to
break up this deal. Um. I see here he's saying,
calling out the company, saying that the claim that fewer
(19:37):
than five percent of its daily active users are false
or spam accounts is dramatically understating, um, the spam accounts
that are on the app. He's also, you know, there
are some fighting words in here. I'm seeing him say
this understatement might cause or is reasonably likely to result
in a company material adverse effect in filing his terms.
(19:59):
That means that would be some thing that would need
to be disclosed to investors. But it does seem like
um Ellen is fixating on that question of how many
of the users on Twitter are verified users and not boughts,
and he's calling in and calling out the company here,
UM making an assumption with UM you know, math that
(20:19):
I'm not sure where it's coming from, but he's saying
that this claim that fear than five percent of the
daily active users are false accounts is actually not true.
So that's the biggest thing that's popping out to me here.
UM that and UM the fact that he says he's
asked for a lot of this information time and time
again hasn't gotten it. And because of that kind of
(20:40):
confluence of events, UM that I know you all have
been covering very closely over the last few months. He's saying,
those are the reasons why he is calling it quits
on this potential deal, and as we know that ain't
going to be in the end of it. An experenca,
thank you so much for jumping on, for getting involved
in the breaking news, for calling out when some of
them prevalent parts of this particular thirteen D filing and
(21:03):
as we know as now looks as though Eleon mask
is trying to back out of his offer for Twitter
breaking news for this Friday. Just to add a little
spice before your weekend, that Elon Musk has indeed terminated
the Twitter Murger agreement. Here is of course sending Twitter
shares spiraling lower and after hours he says some of
Twitter's monthly daily active user disclosures are false or indeed misleading,
(21:25):
and he believes the spam accounts are higher than five percent.
Pleased to say, Crystal ce is with us, She's still
in the building, She's willing to jump on air with us,
and Crystal, of course you've been looking at some of
the nuances to this, because yes, he might try and
terminate this deal, but as we know, this isn't going
to be as easy as all that. It's not very
easy because we have reported that he during it's what,
(21:47):
first of all, one of the quickest ever M and
A processes, and it was so quick because he weighs
some of the due diligence processes. And now he's coming
back and saying that he has requested information and Twitter
hasn't really been flying with that, and Twitter has been
saying otherwise. So the really interesting angle here is whether
there must actually get to get out of this deal
(22:07):
and whether Twitter is going to sue. So that's the
next thing that we're really looking at. And like you said,
it's not going to be it's not going to be
as easy as he um as just you know, walking away.
Many had anticipated that the next stop is the courts,
is delaware. The problem here is who's got the financial
might the world fist world man in the world to
(22:28):
drag this through the courts or indeed a Twitter that
has a fujuiciary duty to its shareholders too, Yes, get
the best price deal, but also not not to spend
all its money on legal fees. That's exactly right. So
whether Twitter is going to fight this fight or hashort
of deal with Musk that remains to be seen. Interesting
to note that Sun Valley is still going on. Muss
is there so as Twitter c CFO. So whether they
(22:51):
can have some deal out during Sun Value, you know,
the billionaires retreat, that could be interesting. Um. But it
definitely dropped at a very unexp to time Friday afternoon,
And it has to be said that to be fair
to Elon Musk, yes he decided to waigh some due diligence,
but he made this bet, this offer just before the
market really started to hit free fall. We've actually been
(23:12):
falling basically ever since the top of the market in January. However,
we are now very much in a bear market when
it comes to the now STA. We have seen tech
valuations plummet, and arguably is it's just him trying to
get a better deal for himself. We've actually seen this
kind of scenario before, right. The market can turn very quickly,
if you remember, in the beginning of COVID, Victoria's Secret
was super close to get involved and the deal got
(23:34):
reversed just because of how much the market has changed.
So that could be one of musk argument here that
the market has turned so much that is no longer
the same price. Well, that to me sounds like a
price recut, not an entire termination. So but he just
entirely skipped that and just went to the termination in
the third D that we saw just now. The whole
story is so unfolding. Could there be a deal? Could
(23:55):
he just actually be using this as a gesture to
recut the price. We don't any of that yet. We're
going to keep reporting and if we have anything more, well,
you see, I don't know, woman. It is a deeply
expensive game of poker. Now. We're all trying to read
every single side on and overall, like the market has
seen a complete drop in M and A right, Like, yes,
(24:15):
there have been some one off enormous deals at the
beginning of the year for the first half that have
managed to support the overall M and A numbers coming
in Microsoft Activision for example, But really we've had every
deal put on ice thus far. That's true. A lot
of processes that have been going on, how to you know,
either scale back or just entirely was put on ice.
Like you said, Um, a couple of big deals like
(24:38):
the b M where are really holding up the M
and A volume this year so far? But we are
actually seeing M and A volume significantly lower than last year.
That's that last year was an outlier. Everything last year
was just enormous um, you know, in terms of volume.
Whether it comes back and it will be extremely interesting. Also,
this year's volume so far has hinged on Twitter and E,
(25:00):
so it could just entirely reverse this year's M and
A outlook. Some bankers might be cross, I'm pleased to say,
also with us the Crystal Ces expertise as Kurt Wagner,
of course, a man who has been following this headline
by headline, blow by blow D by thirteen D and
it was hilarious how many amendments that have been made
since that all important April date when we first learned
(25:20):
he was going to be making that offer. But cut
anything else that you've seen within thet D this time
that has caught your attention. Well, I mean, he's obviously
creating a narrative here right with this letter that he
sent to Twitter today day to July eight, where he
says that the company did not cooperate, that he's been
asking for certain data um that they you know, have
(25:43):
made it difficult. I think the letter also included some
information about Um, you know how they weren't operating under
normal business conditions. We talked in the last segment, I
believe about there being some hiring freezes at Twitter. They
have fired some top executives out. What's interesting about him
kind of claiming that maybe Twitter was making poor business
(26:05):
decisions while we wait for this deal to close is
that I got the sense, and as I was told
kind of throughout the reporting, that Ellen didn't really care
too much about all that stuff. He was worried that,
you know, CEO Prague Agole was still kind of running
the company as you would run a company, right. Um,
So it's just funny that these things that didn't seem
to be a problem are suddenly making their way into
(26:26):
this narrative of why Twitter is at fault for why
this deal is falling apart because certainly from the letter,
Elon Musk is pointing the blame to the company, not
saying hey, I've changed my mind. Yeah, just going back
to that Ted talk that he made just at the
time that he's putting in the offer, and and it
seemed to be not about profit. It was more like
a move for society. He wanted to of course, this
(26:47):
is all about free speech. This is about making this
a private company rather than a public company. He was
doing some sort of service. Why now does well, sort
of we care about all the nuances, and it does
feel ultimately he has about the price, right, And and
that's what I think the answer is. I don't think
that it's the nuances. I think it is that this
ultimately looked and became a bad deal for him. And
(27:10):
so then all of a sudden, all these things that
didn't matter a few weeks ago suddenly do matter because
they help him in his argument that hey, I try
to make a good faith deal and Twitter did not. Right.
That's what we're going to start hearing. That's what we're
seeing in this letter, and I imagine that will be
the argument moving forward. Now. The funny thing about the
body issue, right, is that Elon Musk has been complaining
(27:33):
about Twitter bought since before he bought the company. So
he knew and has known that bots are a part
of Twitter. He's had bad experience with them before, and
now he's, you know, again, coming out and using the
body issue as a reason to maybe walk away from
the steal, or at least attempt to walk away from
the steal. So you know, I really think we're going
(27:54):
to be parson this for a while. But my gut
initial read here is that he's really trying to, you know,
set up his narrative for why he thinks Twitter is
responsible for this deal falling part and not him. And
obviously he's doing that because if he's the one who
walks away or makes this an issue, Twitter might be
able to sue him to try and force him to
complete the deal. Wagner, we thank you so much for
(28:16):
all the breaking news analysis, and Christal c as well
really jumping in the share and giving us such analysis
and nuance to what we are learning. Of course, that
is Elon Musk is looking to terminate the deal to
buy Twitter. Welcome back to Bloomberg Technology. Guess what breaking news.
Elon Musk, as many had predicted, has indeed started the
(28:37):
process of trying to terminate the deal to buy Twitter.
Here's a filed and amended thirt D and of course
is calling out phil failure to provide essential information, ignoring
of requests for information, in particular what he calls a
number of bots that he thinks of far in excess
of five percent. All of this has driven Twitter stopped
down after hours and moving some other shares as well.
(28:57):
kJ Greyfeld, I'm pleased to say still in the off
with us and a Coles Cosset report to You've been
looking at a lot of notes leading up to this
about probabilities whether this deal will get done. It's been
interesting to watch sort of the Wall Street community talk
about this deal, and Dan Ives from One Bush put
it on a note yesterday actually UH saying that there's
a sixty chance that this deal even gets sun. That
(29:19):
was yesterday, of course, fall following some Washington Post reporting.
They also suggested that there could be a thirty five
percent chance that must go loss away from the deal altogether,
which obviously has borne out now. And obviously the bots
question has been a big question regarding this deal. But
there's also the share price to consider. Of course. One
Musk had made this offer. It was at fifty four
(29:41):
dollars and twenty cents a deal, UH, and that had
been sort of floated in the analyst community that maybe
that price is just too lofty, maybe they'll negotiate it
down more. And you can see Twitter shares right now
trading around thirty four dollars fifty four cents, so that
premium that dis that between the two had grown and
(30:03):
obviously growing now and now the deal is terminated. And
I also want to ask you a bit about the
Tesla market reaction, one that you've pointed out on Twitter itself.
I don't agree as what we're using that social media
platform to brighten the knees, but remind us as to
why to Tesla might bounce on it. So the deal
here is that obviously Musk is the CEO of Tesla,
and so the bold case behind my you're probably seeing
(30:24):
the shares move higher, and after hours I see Tesla
shares up over one percent at the moment, higher than
when I tweeted this. Is that perhaps Musk will now
refocus his attention on Tesla, supposedly, you know, his main company,
but as we know, I mean, Musk has always been
sort of a part time CEO of Tesla. He obviously
has a lot of projects going on, including SpaceX. So
we'll see if this move holds when we actually get
(30:46):
into real trading on Monday. But interesting to see the
after hours reaction. You see the knee jerk move lower
and Twitter shares down over six percent. You look at
Tesla shares up moving up to one and a half
percent or so. Now, so that is the knee jerk
Katy Greifeldt. As always, we thank you for the knee
joke reactions, the ultimate reactions. Mobidus to say also ahead
of Wall Street Week, because I've very own David Weston,
(31:08):
of course, anchor of that show, anchor of of course
of the politics show for us as well, and also
a man who knows an awful about the law, and
this is going this is going to the courts, right.
The one clear winner in this that the lawyers. They're
gonna be a lot of lawyers charging a lot of
money and you're gonna pay a lot of billbill hours
as a result. I mean, I think there's so much
(31:28):
we don't know at this point. And we know that
now Elon Musk says he's not going to go forward
with the deal, we have to take him at his word.
At the same time, he has some legal obligations he
has to address. The Twitter board has been very steadfast
and saying we're holding you your deal, and you have
to ask, is he really getting out of it or
is this a negotiation? Is this a negotiation over the
one billion dollar big breakup? Fee or a lower price
(31:50):
is Katie just suggested for the company. Let's be honest,
he would not have offered forty four billion dollars a
month after we offered it. It was no longer a
sensible price. And he's saying, I'm not sure I wanted
at that price. We'll see, but I'll guarantee it. There's
a lot of legal action coming up. And of course, David,
it is the fiducial duty of the board to fight
for the highest possible price. It is also going to
(32:11):
be incredibly costly for the board of Twitter and indeed
Twitter's executive team to be paying these sort of legal
fees when we know it's up against the wealthiest man
in the world. Absolutely, and two other things that I
add to that. A number one, there is a fairness
opinion that was rendered by Goldman, Sachs and others saying
this is a fair price. It's aftuly hard for the
board to say, Okay, we have a fairness opinion saying
that price is the fair price. Now we're just gonna
(32:32):
give up on it. We're not going to pursue that
anymore at all. That's a tough thing to do, and
the board has a pretty good legal argument, I would think,
and they've been pretty steadfast. At the same time, I
suspect part of what's driving Mr Musk is the board
has shown very little willingness to negotiate with him. Uh
and this, as I say, and maybe he's really trying
to get out of It's also possible that that in
(32:53):
fact he's he's really trying to get a real negotiation
going on. And also, David, going back to how the
steel erupted, He's have it did this in in a
completely bombastic way. For many a lawyer that it felt
as though documents were put in too late, documents weren't
filled out in the normal way, and indeed it seemed
as though he waved his rights to due diligence. Well
he did, I think explicitly waves the rights and due diligence,
(33:15):
which which says something but I say bombastic and Elon
Musk is not necessarily contradictory. Right, It's not a total
surprise that would work. But I think from telling you
to people who know Elon Musk can have dealt with
him even during this time, I think there's a good
part of the almost that really did want to buy Twitter.
Maybe he still does want to buy Twitter. He generally
wants to buy this company, thinks he can do something
good with this company. So I don't think he was
(33:37):
just toying with it at all. I just think he's
definitely of two minds. Apparently, David Western, what would do
without your legal expertise? And indeed po a man who
is going to go on and talk about this a
little bit, and of course your show, which we will
want to be watching Wall Street Week Balance of Power
as well. Of course he can tune into David Western there.
But we thank also our own Kat Grayfield for the
market moves and the reactions. More for you terms of
(34:00):
analysis to the breaking news this Friday. Of course, you
know Mask backing away from that forty four billion dollar
deal for Twitter. This is Blomberg. The disastrous scenario has
occurred as according to Dan Ives as well, this of course,
a key analyst on all things Twitter, putting out a
(34:22):
note as we speak from web Bush, Dan, I've saying
that the termination that we've just learned Harv, you know,
Mask trying to terminate the four billion dollar deal for
Twitter is a disaster scenario for Twitter and it's board.
As now the company will battle Musk in an elongated
court battle to recoup the deal and or the breakup
fee of one billion dollars at minimum. To discuss us
a little bit more amid all of this analysis, I
(34:44):
want to bring in one Ed Ludlow, who has been
on the plane back from one some valley event where
absolutely everyone has been talking about this deal. You managed
to read the letter that the T and D. What
were people saying about this deal to you? Ed Ludlow?
You know all of the investors I was spoken to
do over the last few days have been bracing for this,
the idea that a termination was possible. We know about
(35:06):
the one billion dollar reverse termination fee for both parties
that you know, investors are bracing for an outcome where
we have a long protracted legal battle between Elon Musk
and Twitter's board. You look through the letter that Elon
Musk sent to Twitter chief legals forgetting you know, he's
pretty clear he made multiple attempts to request information about
(35:28):
how the scientific approach the Twitter's board was taking to
quantifying level of box on the platform. Right, this idea
that there's less from five defensive blots on the platform
in terms of the user base, there's been a longstanding
boiler plate the Twitter of used in regulatory filing for
many years. And so it's it's kind of weird and
surprising that this was an issue from Musk in the
(35:49):
first place, because you remember that eight or twenty when
he signed a deal he waived due diligence anyway, you know,
with with the news as it is breaking that he's terminated.
You know, everyone I've spoken to in some valley it
thinks that this is bad for Twitter as a disasters
don for it, because you know, they're already cutting costs.
They've been bracing for a recession in which they're going
(36:11):
to have the lower r and defending lower head count.
And market is looking okay globally, but it's not perfect.
And now they're going to have to go to court
and and and get this done. And it was only
yet to day carried. You remember that they reiterated they
intended to follow through with the terms of the original deal.
And yet here we are, me on a jet playing
you in the studio and Pelon must walking away from
(36:32):
the deal just remind us because he talks of not
enough information. He talks of multiple requests. I thought Twitter
had been delivering information regarding bots. So in the letter,
Elon Much's attorneys say that by Twitter's own admission in
the communications they've made in the end of the beginning
(36:55):
of May and through the June period, that the data
would incomplete. Twitter's argument they took be is that a
third party be a third party and stored by the
mask been a third party chosen cannot verify the level
of boxing the platform, the reason being the twitters methodology
for verification uses a mix of private data that they
hold as the platform operator m And you know, private
(37:18):
data is such that they're protecting the contemer and public
data and only Twitter has access to that. And that's
what the discussion is around how complete that data work. Yeah,
and remind us because Elon Musk is due to be fly.
I think he's already arrived, has he not, or is
at least due to arrive at some values, want to
be giving a speech tomorrow. And the key issue is
al and Co were then advisor on the deal. In
(37:40):
some way, this is this could be an amazing meeting
of all the top executives because I understand the CEO
and the CFO Twitter also at some value. Yeah, I'm
just going to say out loud, I wish I was
still in either or I wish I was with you
in the studio, because this is the most crazy story
of my career in lifetime. That al and Co. He's
(38:01):
an advisor on the Twitter side, okay, Hanlen and Co
is a long standing investment bank advisor for Twitter. And
then on the other side, they've invited Elon Musk in
the conference. No one saw Paragage Segal and Elon Musk
in the same space as you know. I asked med
Peogle and Paragagon Roll last night if they were worried
about Elon Musk walking your way. Twice they declined to
(38:23):
answer the question, and t four hours later he walked away.
So there we go. There we go, at Dudlow, We'll
let you go for a moment to thank you so
much for jumping on the phone with us, Ed Ludlow.
With the analysis, We've also got some expan analysis from
a senior analyst on Twitter of web Bush Securities, one
Dan Ice, who has a rating neutral on Twitter, who
has a price of thirty eight dollars seventy nine, and
(38:44):
it was a twelve month price target of forty three dollars.
But Dan ives, you've already put out a note. You're
a busy man. What do you make of this walk away?
I mean, for Twitter, it's a it's a namedayor scenario
because now it's a standalone company. Start could be twenty
five thirty hours on Monday and they feed just a
brutal core battle with Musk, and this has been it's
(39:04):
been a you know, a circus show in terms of
from the beginning it never made sense as to why
Musk going to buy it, But now the way it ends,
it's just it really ends. It puts them between a
rock and a hard place, and the street's gonna, you know,
really have a hard time with this. In terms of
Twitter basically being viewed as damaged goods, I'm really interested in.
(39:24):
And originally, as we were hearing when we talked to
David Western that you know, forty four billion dollars was
deemed fair value for overall Twitter. And as said, I
think my Goldman sacks, why do you have a fair
value price of thirty eight dollar seventy nine? What is it?
It was the underlying business model. How much has that
eroded since Elon Musk first put in his offer, well,
first off billion from the beginning never made chance and
(39:47):
that's why there was no other bidder within miles of it.
You know, we always to fair value for Twitter was
somewhere in an acquisition forty and now the fake account
bod issue, you will as that's really come to the forefront.
I think now this condition is the stock that's gonna
have a chew in front of it because of those metrics,
(40:10):
and also the markets changed so much sense to deal
whether it's Must get in cold feet and now it
really sends us onto a tail spin in terms of Twitter.
And I also think Must comes out with a black
eye in terms of how this was all handled. I
agree and many would agree, I think in terms of
like how something of news organizations view M and A offers.
(40:32):
But I'm interested in your take from a four billion
dollar price tag. What is it about the box? I
thought we sort of knew about the box and the
fact that what is it that from a Twitter perspective
could have been done better on that. Well, it's all
about what is it five? Or is it? And I
think even though the body issue has always been a
(40:53):
black cloud over Twitter's name, you know, even if you
go back over the years, now it comes down, that's
just how how big is that number? Because that's demodogation,
that's the metrics. Then on the other side, others will
argue Must just this is a scapegoat, it's cold feed.
He basically woke up one day decided not to do
it in typical must fashion. And now the knives will
(41:15):
be sharpened going into what's just going to be a
Game of Thrones core battle. We currently understand, of course,
and them and breaking news continues, but we do understand
that the Twitter board is committed to closing this transaction.
According to Brett Taylor, now the Twitter board is planning
legal action to enforce this agreement. Dan, how much the
money suck? Is that? Look? I think right now, I
(41:37):
mean Twitter is gonna officially come out with that stands
just deal. When the stocker's trainer at thirty eight bocks,
he was telling you twenty was never gonna happen. Now
the question is is there still some chance that there's
some renegotiation that happens. I think the will is too
much at this point. And now Monday, Twitter is gonna
(41:57):
be looking at the stock with the two in front
of the probably high twenties. And now this starts to
go into free fall. Tanys, we want to thank you
so much, Senior Alice. Over their web, Bush Security is
already putting out an on this deal. As we say,
the Twitter board is planning legal action to enforce this agreement.
This is coming from Brett Taylor, Here's the chairman of
Twitter's a busy man because it's also the co se here.
(42:20):
We know, of course the salesforce. But he is on
the board of Twitter, and he is saying, look, we're
gonna be fighting this. Tend to close the transaction at
fifty four dollars twenty a share price. They received a
notice of the purported termination from Musk, and they tend
to close this transaction. They're confident in the merger pact
for all of this, says Bloomberg in New York. Have
a good weekend.
We start with the disclaimer. This episode of Bloomberg Technology
was taped just as the news broke that Elon Musk
is terminating his deal to buy Twitter. From the heart
of where Innovation, money and power CALLI in Silicon Valley
and beyond. This is Bloomberg Technology with Emily Jay. I'm
(00:33):
Caroline Hyde in New York. I'm in for a many
chang and this has Beenenberg Technology. Coming up over the
next hour, Elon Musk's escalating battle with Twitter, the fully
four million on a takeover offer, possibly in Jeopanese plus TSMC,
the world's watches contract chipmaker, reported better than expected Courtney revenue,
signaling that electronics demand is holding up better than investors feared.
(00:54):
And we look at today's jobs report, the US number,
and how the tech sector is faring out in the numbers.
It's especially with many companies laying off employee. We had
to that in but a moment, befess, let's got to
check on these markets. And guys, Katie greyfa with quite
a run for the mastack, quite a run, kind of
a muted end to what had been you know, a
week of games. You look at the SP five hundred
(01:15):
ending down just a hair about a tenth of percent.
Tech of course fared better than AZZAC one hundred, gaining
about a tenth of percent. Your big outperformer was the
chip stocks. You have the Philadelphia Semiconductor's Index posting a
half a percent gain even with two year yields rising
almost nine basis points, just on the nose after that
blockbuster jobs report. We got this moment, but let's stay
(01:36):
on the chip because they were the outperformer today, outperformer
on the week. If you look at the past four
days for the socks index, up six and a half percent.
Most of those games came yesterday. You had Samsung come
out report a bigger than expected jump in revenue. That's
sort of changed the mute mood music for the space
in a really good way. And as you can see,
(01:56):
closing out with some really solid gains for an inte
that has been struggling. And speaking of solid games, let's
end on Bitcoin just for you, Caroline, and had a
pretty good week, best week actually since October. But if
you look year to date, as you can see, barely
made a dent. Bitcoin still down over fifty two percent,
close to fifty year to date, and as you look
(02:19):
at this, you can see that the line went up
a little bit, but again barely a scratch for what's
been a really bad year for bitcoin. That has been Katie,
we thank you, and we've kind of been bracing ourselves
for pretty bad job support as well. If you look
at the anecdotal evidence coming from some of the tech
firms at least, but actually US employee has added way
more jobs in June than forecast, and the unemployment rate
(02:39):
held near a five decade low, signs of both strong
demand tight labor market that will keep the federal officials
pretty much tilted towards another interest rate height to the
tune of fifty or seventy five basis points. Jane's our
class door drives us now to discuss the current labor
market and Dania. Before we dig deep into the nuances
particularly affecting the tech sector, let's talk about broad rush
(03:00):
three two thousand jobs at it. It was good. Yeah,
this is a job market that fundamentally remains healthy. We're
seeing strong job gains and even though there is rain
on the forecast, we still see that skies are clear
for the labor market. Where did we see any weakness
of a tool? My eyes trained for example, into the
(03:22):
participation levels that was a blemish in the report. We
did see labor force participation rate comeback a little bit,
and that was in large part driven by a decrease
for black workers. However, I think that we shouldn't put
too much stock into one month changes, and I do
think that as long as the job market continues to
remain tight, then we should see that labor force participation
(03:43):
rate continue to trend upwards like it's been doing over
the last year. And what keeps it tight there for
Daniel for the meantime, well, we still see that employer
demand is extremely high. There over eleven million job openings,
almost still two job openings for unemployed worker, and so
as long as that relations ship holds, than we should
continue to see more workers being drawn in from off
(04:04):
the sidelines. And yeah, I have to say to that end,
I was confused when you look at the amount of
women in the workforce is still well below where it
was pre pandemic. As you say, black workers, Asian workers
in particular, men not participating in the levels that they
were previously. Is it childcare that's the issue. Is it
lack of good pay benefits? What is it that's holding
(04:26):
people back. Do you think there definitely are some pandemic
related factors, So when we look at childcare and elder care,
which I think is especially important to keep in mind
given the context of one COVID, UH, those care factors
are definitely something that are still holding people out of
the economy. COVID itself is still of course going on,
and that that does prevent some workers from fully engaging.
(04:47):
But I think it's also important to remember just structurally
that because of retirement, because of the aging population, we
should naturally expect the way before participation rate to come
down a little bit um And on top of that,
we also have other factors like immigration, which has been
particularly low over the last few years, holding down some
potential lay before it stains. Daniel. I'm interested in therefore
(05:09):
going sector by sector because what we do continue to
see is kind of a shifting of where we've been spending.
We all want to go and have experiences, we want
to go out, we want to eat. We don't want
to be buying things in quite the degree that we
were before. Now you're seeing that born out in terms
of labor still well. I actually, I think what's really
interesting about today's report was that we saw a very
broad based job gains. So even though there are concerns
that consumer spending is rotating away from goods back to services,
(05:32):
we actually saw healthy job gains in retail around about
fifteen thousand jobs added after a job bosses last month,
and so that's still an area of strength where we
are still seeing job gains despite some of these anecdotes
that we've been hearing from companies from earning calls of
weakness and retail center. Well, I mean, let's talk about
some of the anecdotal evidence, because it's not just been
(05:53):
in retail, it's been in real estate, particularly technology driven
real estate. We've seen the likes of Game Stop saying
that the letting go of workers. I mean, I know
these are very tiny pools of labor. But then you
have a headline that comes from the information that says
Oracle is discussing laying off thousands of workers as they
look to cut you know, about a billion dollars in
terms of costs. Are we going to brace ourselves for that?
(06:15):
Daniel Well, I think today's jobs report is actually a
little bit of a surprise because we actually saw information
at twenty five thousand jobs, which was well above what
you might expect given we've heard all these anecdotes, these
prominent anecdotes of the layoffs, and I think what we
might be seeing is that yes, there are prominent laoffs,
but they might not be widespread quite yet, or at
the very least many workers who are being laid off
(06:36):
are able to get up back on their feet pretty
quickly and find other roles. Certainly, what we've been hearing
anecdotally is that maybe candidates have two job offers as
opposed to five job offers on the table. But the
fact is is that they are still finding jobs, they
are still being hired, and what about the wages that
they're seeking, Daniel, I mean, what was interesting is probably
music to the federal reserves here is the wage inflation
(07:00):
is actually being pretty suppressed. At the moment. Wage inflation
is slowing, and I think that that is a result
of the slowing labor market overall, because in that example
I gave, if somebody has five job offers on the table,
then certainly they have a lot more leverage than somebody
who only has two or somebody who only has one.
In all of those cases, that person is probably getting
a new job, but their wage growth potential is very
(07:22):
different in eutra of those scenarios. Daniel Chow, thank you
so much. From Glastore. Of course, senior economists, they're talking
all about some of them numbers and nuances in the numbers,
particularly around the tech sector. We thank him. We start
with the disclaimer. This episode of Bloomberg Technology was taped
just as the news broke that Elon Musk is terminating
(07:43):
his deal to buy Twitter. Well, let's check in on
where the big deal is or isn't going. Of course,
we're talking about elo Musk's escalating battle of the boats
with Twitter. It's possibly threatened to walk away from that
forty four billion dollar takeover. Offers Kurt Wagner, as always,
(08:05):
is all over the story and he joins us, now,
so I mean, is it about bots? I don't think
it's actually about bots. I think, as we've been talking
for a couple of weeks now, Caroline, I think this
is probably about Ellen's hope of renegotiating this deal. Right,
the market has changed dramatically since he agreed to buy
Twitter for fifty four dollars and twenty cents per chair
(08:26):
in late April. I imagine if he had waited even
just a month, he probably could have gotten a company
for a much lower price. And I get the sense
that he's using this bod issue to try and you know,
force a change there. Thus far, Twitter has said again
and again we are holding him accountable for the price
originally talked of. But realistically this is heading for the courts,
(08:47):
right if if indeed he does walk away. It feels
that way because as you point out, Twitter really, I
guess has control here in the sense that he has
agreed to buy the company for this price, right he
cannot simply walk a way without some type of illegal
battle on Twitter seems to be saying that they're willing
to do that. Now. I don't know how beneficial that
is to Twitter to go spend a lot of time
(09:09):
and money fighting him in port. Maybe they would, you know,
come to some type of settlement or agreement to lower
the price without having to get there. But you know,
it's in Twitter's best interest here to get the best
deal for the company. And right now, that's fifty four
dollars and twenty cents to share that he offered back
in April. Suddenly and overall, do you think at some
valley we're inspecting in a mosque to arrive. Of course
(09:32):
Alan and Co is advising we understand on the deal.
So I mean this sort of the debate is going
to come up. It's going to be lifted at some point, right. Yeah.
The question is he going to be um sharing any
new information? And I think he last kind of spoke
publicly at the towards the end of June maybe June,
and he really just kind of said stuff that he'd
already been saying before. And then there was a report
(09:53):
yesterday he probably saw from the Washington Post that that
he's unhappy still with these bought figures and what Twitter
is putting out on the boat front. So it may
just be re reiterating the kinds of things he's already
been saying. Of course, anything he says new would be
super significant, because I feel like it's been a lot
of the same stuff from both sides now for a
couple of weeks. What's the one thing you're looking for
on this stale there fall. I guess I want to
(10:15):
see if he's actually willing to walk away, right, I mean,
he's sort of threatened it. Um. I'd say two or
even three times. Now, is he really willing to say
I wish I hadn't done this deal and I'm going
to force Twitter's hand to sue me. Now, of course
that's that's kind of like saying I'm most looking forward
to the you know, the big fight scene at the
(10:35):
end of the movie. Of course everyone is. But I
do really think that that's the main hang up here,
you know, is is he really going to do what
he seems to be threatening to do. Tell us a
little bit about how Twitter is sparing in all of this.
It's been a tough It's been a tough go if
you're an employee of Twitter for the last few months.
Not only is this deal kind of hovering over everything,
kind of creates a little bit of awkwardness around you know,
(10:57):
what should we focus on? What should we build? Um
But they have said they're going to do cost cuts,
They did hiring freeze, they even rescinded some job operas,
and then there was news yesterday that that they actually
laid off a hundred people. It's a very small percentage
of the overall workforce, but you get the idea that
things just aren't really moving in the growth direction for
them right now, and when you add that on top
(11:18):
of the fact that they're waiting for this deal to
possibly close but possibly not. I just think it creates
a really awkward situation if you're an employee at the
company today and how's it thus far in any way?
You know, sometimes bad news is well, all PR is good.
PR hasn't made people turned to the social media platform?
Have people re engaged with it been previously before? Because
(11:39):
it's been in the news cycle so much, you know,
it's it's a good question. We'll actually probably find out
because the second quarter just ended. Of course, Now last
time they didn't do a full earnings, they didn't do
a call. They just kind of released kind of a
bare bones press release with some numbers. But it'll be
interesting to see if the user growth is still there.
But you know, is this driving people to service? Like
a little skeptical only because a lot of things that
(12:01):
drive people to Twitter are major news events, um, you know,
like an election for example. I'm not sure if the
idea of there being an acquisition is the kind of
news event that's going to bring people to the service.
Just stick with us for a moment, because we've got
a thirteen d as we like to get just on
a Friday when everyone's going home. But we are getting
some sort of undated d coming from Elon Musk of
(12:23):
course regarding his bid for Twitter. And understandably this is
a We're going to have to read through it in
real time overall, but it seems to be once again
updating us previously we've had sort of how much of
the deal has basically got backing from from private sources
as we understand, And and amend's the schedule thirteen D
(12:45):
initially filed by Elon Musk with the SEC on April
the five. With respect to the offer, it says amended
on the eleventh or fourteenth and twenty one seven. I mean,
it goes on to say all the other times that
it's been amended overall, but it looks as though that
they are amending adding the following the information that send
a letter to Twitter formally notifying Twitter that the reporting
(13:06):
person is terminating their Murger agreement. Kurt. The foregoing description
and the reporting person's letter is qualified in its entirety
by reference to the full text of the letter, a
copy of which is attached here to an exhibit p
and incorporated here in for reference. The letter. Therefore, I'm
going to be opening up. This is real time reporting
on Bloomberg as well at the moment. So it does
(13:27):
seem as though, you know, MASKU has filed an amended
and as I've been saying, it looks as though they
are saying that they are terminating their murder agreements. So
saying on July, what do you make of it? I mean,
you're hearing me really out live on on air at
the moment, and we're going to be rushing for every
single reporter that's currently in the building. But do tell
(13:48):
us as to whether or not this could well have
been expected overall? They say, this is actually a letter
that's dated to Twitter Inc. MS Gaddin says, we refer
to the agreement in section six point four. They talk
about the business for any reasonable business purpose related to
the consummation of the transaction. Twitter has not complied with
contractual obligations. It says, for nearly two months, Mr Musk
(14:10):
has sought the data and face information necessary to make
an independent assessment of the prevalence of fake or spam
accounts on Twitter's platform. This information is fundamental to Twitter's
business and financial performance, and he says, thus for thus
far necessary, they say, and it's necessary to consummate the transaction.
So it looks as though Mr Musk has decided that, look,
(14:31):
we can't do it because we haven't got the right
amount of information on bots. Do you see my face here?
This is the base of someone who's learned, in who's learning.
You know that the last three months of work and
reporting that I've done is just kind of the tip
of the iceberg here. It sounds like we have more
to go. But am I surprised, not only because we've
(14:52):
seen this move in this direction, right, We were just
talking about that that they haven't been able to agree
on this, and that you know, Elon seems very focused
on reducing the cost of this deal. I will say
I didn't expect or don't did not expect him to
walk away from something entirely. Again, I thought that he
would try to renegotiate. But you know, we need to
(15:13):
go look at this further and figure out exactly what
he's trying to do here. And maybe this is a
first step towards a renegotiation. Right, but it certainly feels like, um,
this thing that has been boiling for now a few
weeks clearly is reaching the boiling point. Right. It says,
of course, his financial advisors and Morgan Stanley have been
requesting critical information from Twitter as far back as May ninth.
(15:36):
How much have the bank has been involved in all
of this? How much has you know, Musk had a
lot of a lot of help and backers from elsewhere. Yeah,
I mean he's had a whole lot of advisors throughout
this whole process, right, I mean, these things are not
It's not just Elon Musk and Paragua from Twitter sitting
around hashing us out right. There are entire teams of
people that are that are passing information, that have been
(15:56):
in contact daily about this kind of stuff. I think
the debate eight has been what is Twitter giving, uh,
Elen and what is is Elon demanding? I think in
this case, you know, Twitter has said, hey, we're gonna
give you the fire hose of tweets. We're gonna give
you every public tweet on the service. Um and Ellen, clearly,
as you just read, is saying that's not sufficient for
for calculating what I need to calculate, which is the
(16:19):
percentage of box. And I think the real issue here
is that there they just don't see eye to eye
on this body issue, and clearly that's big enough for
him to pull this offer. But again, it feels like
we've been building this for some time. I have to
imagine he had a little buyer's remorse, given that he
made his bid in April and what we've seen, what
the market has been doing the last few months since then,
(16:40):
all of this makes it feel to me that I
reiterate the same sort of question before. But this is
destined for the courts, right, I think so? Right, because
we as we again we were just talking about Twitter
has said repeatedly we planned to enforce the merger agreement. Right,
they have come to an agreement. So even him saying, hey,
I'm pulling out from this thing Twitter, my understanding is
(17:00):
that they legally can try and force him to buy
the company for the price that he agreed to. So
I don't know what him. Again, need to look closer
at the filing. I learned about it just as you
were reading it to me on on air here. But
I do think that this feels like it's headed for
a court. Just remind me of the break up fee. Yes,
(17:20):
so there is a one billion dollar break up fee,
but it's not as simple as Ellen just simply, you know,
paying a billion dollars and walking away. There has to
be other elements of the deal that kind of fall apart,
and then he would pay that as a penalty. Again,
it's not a fee that you can pay just because
you feel like you wish you'd got a better deal. Cut.
I can't say what would do without you. Thank you
for being there in real time on Telly to be
(17:42):
able to read through filing with me. We thank you
so much. Kut whacking. So as we say, you know
Musk is terminating his Twitter merger agreement, we understand a
new thirteen D being filed joyfully on a Friday afternoon,
just everyone wants to head out for a well deserved rest.
He says that the Twitter has failed to provide essential
information and hasn't complied with contractual obligations. All of this,
(18:03):
of course regarding those all important bots. He says, shares
of Twitter sinking and after hours join us a more Blomberg.
We start with the disclaimer. This episode of Bloomberg Technology
was taped just as the news broke that Elon Musk
is terminating his deal to bout Twitter. Let's get back
(18:32):
to the breaking news. Twitter shares falling after hours after
Elon Musk has filed a thirteen D amended thirteen D
saying that he wants to be backing out of the
offer to be buying Twitter for billion dollars. He's terminating
the merger agreements, saying it's failed to provide essential information
and they sometimes ignored requests for information, and pleased to
(18:53):
say that Alex Brinka is joining us. Now you are
meant to be talking about another social media platform, and
we're very pleased that you're going to take some questions
on this new breaking news of Cools being dumped on
a Friday afternoon annex. I'm really wonderful to have you
back on with me. It's been a long time since
we've spoken. Talk to us about what you're making of
this particular move. We'll sort of saw it coming, Yeah,
(19:16):
And I was looking at this letter here and you'll
excuse me having a peek at my phone because it
just hit the wire. Something that I think is super interesting.
Um in this letter Elon Musk and the filing is
basically trying to invoke, um, some of those requirements to
break up this deal. Um. I see here he's saying,
calling out the company, saying that the claim that fewer
(19:37):
than five percent of its daily active users are false
or spam accounts is dramatically understating, um, the spam accounts
that are on the app. He's also, you know, there
are some fighting words in here. I'm seeing him say
this understatement might cause or is reasonably likely to result
in a company material adverse effect in filing his terms.
(19:59):
That means that would be some thing that would need
to be disclosed to investors. But it does seem like
um Ellen is fixating on that question of how many
of the users on Twitter are verified users and not boughts,
and he's calling in and calling out the company here,
UM making an assumption with UM you know, math that
(20:19):
I'm not sure where it's coming from, but he's saying
that this claim that fear than five percent of the
daily active users are false accounts is actually not true.
So that's the biggest thing that's popping out to me here.
UM that and UM the fact that he says he's
asked for a lot of this information time and time
again hasn't gotten it. And because of that kind of
(20:40):
confluence of events, UM that I know you all have
been covering very closely over the last few months. He's saying,
those are the reasons why he is calling it quits
on this potential deal, and as we know that ain't
going to be in the end of it. An experenca,
thank you so much for jumping on, for getting involved
in the breaking news, for calling out when some of
them prevalent parts of this particular thirteen D filing and
(21:03):
as we know as now looks as though Eleon mask
is trying to back out of his offer for Twitter
breaking news for this Friday. Just to add a little
spice before your weekend, that Elon Musk has indeed terminated
the Twitter Murger agreement. Here is of course sending Twitter
shares spiraling lower and after hours he says some of
Twitter's monthly daily active user disclosures are false or indeed misleading,
(21:25):
and he believes the spam accounts are higher than five percent.
Pleased to say, Crystal ce is with us, She's still
in the building, She's willing to jump on air with us,
and Crystal, of course you've been looking at some of
the nuances to this, because yes, he might try and
terminate this deal, but as we know, this isn't going
to be as easy as all that. It's not very
easy because we have reported that he during it's what,
(21:47):
first of all, one of the quickest ever M and
A processes, and it was so quick because he weighs
some of the due diligence processes. And now he's coming
back and saying that he has requested information and Twitter
hasn't really been flying with that, and Twitter has been
saying otherwise. So the really interesting angle here is whether
there must actually get to get out of this deal
(22:07):
and whether Twitter is going to sue. So that's the
next thing that we're really looking at. And like you said,
it's not going to be it's not going to be
as easy as he um as just you know, walking away.
Many had anticipated that the next stop is the courts,
is delaware. The problem here is who's got the financial
might the world fist world man in the world to
(22:28):
drag this through the courts or indeed a Twitter that
has a fujuiciary duty to its shareholders too, Yes, get
the best price deal, but also not not to spend
all its money on legal fees. That's exactly right. So
whether Twitter is going to fight this fight or hashort
of deal with Musk that remains to be seen. Interesting
to note that Sun Valley is still going on. Muss
is there so as Twitter c CFO. So whether they
(22:51):
can have some deal out during Sun Value, you know,
the billionaires retreat, that could be interesting. Um. But it
definitely dropped at a very unexp to time Friday afternoon,
And it has to be said that to be fair
to Elon Musk, yes he decided to waigh some due diligence,
but he made this bet, this offer just before the
market really started to hit free fall. We've actually been
(23:12):
falling basically ever since the top of the market in January. However,
we are now very much in a bear market when
it comes to the now STA. We have seen tech
valuations plummet, and arguably is it's just him trying to
get a better deal for himself. We've actually seen this
kind of scenario before, right. The market can turn very quickly,
if you remember, in the beginning of COVID, Victoria's Secret
was super close to get involved and the deal got
(23:34):
reversed just because of how much the market has changed.
So that could be one of musk argument here that
the market has turned so much that is no longer
the same price. Well, that to me sounds like a
price recut, not an entire termination. So but he just
entirely skipped that and just went to the termination in
the third D that we saw just now. The whole
story is so unfolding. Could there be a deal? Could
(23:55):
he just actually be using this as a gesture to
recut the price. We don't any of that yet. We're
going to keep reporting and if we have anything more, well,
you see, I don't know, woman. It is a deeply
expensive game of poker. Now. We're all trying to read
every single side on and overall, like the market has
seen a complete drop in M and A right, Like, yes,
(24:15):
there have been some one off enormous deals at the
beginning of the year for the first half that have
managed to support the overall M and A numbers coming
in Microsoft Activision for example, But really we've had every
deal put on ice thus far. That's true. A lot
of processes that have been going on, how to you know,
either scale back or just entirely was put on ice.
Like you said, Um, a couple of big deals like
(24:38):
the b M where are really holding up the M
and A volume this year so far? But we are
actually seeing M and A volume significantly lower than last year.
That's that last year was an outlier. Everything last year
was just enormous um, you know, in terms of volume.
Whether it comes back and it will be extremely interesting. Also,
this year's volume so far has hinged on Twitter and E,
(25:00):
so it could just entirely reverse this year's M and
A outlook. Some bankers might be cross, I'm pleased to say,
also with us the Crystal Ces expertise as Kurt Wagner,
of course, a man who has been following this headline
by headline, blow by blow D by thirteen D and
it was hilarious how many amendments that have been made
since that all important April date when we first learned
(25:20):
he was going to be making that offer. But cut
anything else that you've seen within thet D this time
that has caught your attention. Well, I mean, he's obviously
creating a narrative here right with this letter that he
sent to Twitter today day to July eight, where he
says that the company did not cooperate, that he's been
asking for certain data um that they you know, have
(25:43):
made it difficult. I think the letter also included some
information about Um, you know how they weren't operating under
normal business conditions. We talked in the last segment, I
believe about there being some hiring freezes at Twitter. They
have fired some top executives out. What's interesting about him
kind of claiming that maybe Twitter was making poor business
(26:05):
decisions while we wait for this deal to close is
that I got the sense, and as I was told
kind of throughout the reporting, that Ellen didn't really care
too much about all that stuff. He was worried that,
you know, CEO Prague Agole was still kind of running
the company as you would run a company, right. Um,
So it's just funny that these things that didn't seem
to be a problem are suddenly making their way into
(26:26):
this narrative of why Twitter is at fault for why
this deal is falling apart because certainly from the letter,
Elon Musk is pointing the blame to the company, not
saying hey, I've changed my mind. Yeah, just going back
to that Ted talk that he made just at the
time that he's putting in the offer, and and it
seemed to be not about profit. It was more like
a move for society. He wanted to of course, this
(26:47):
is all about free speech. This is about making this
a private company rather than a public company. He was
doing some sort of service. Why now does well, sort
of we care about all the nuances, and it does
feel ultimately he has about the price, right, And and
that's what I think the answer is. I don't think
that it's the nuances. I think it is that this
ultimately looked and became a bad deal for him. And
(27:10):
so then all of a sudden, all these things that
didn't matter a few weeks ago suddenly do matter because
they help him in his argument that hey, I try
to make a good faith deal and Twitter did not. Right.
That's what we're going to start hearing. That's what we're
seeing in this letter, and I imagine that will be
the argument moving forward. Now. The funny thing about the
body issue, right, is that Elon Musk has been complaining
(27:33):
about Twitter bought since before he bought the company. So
he knew and has known that bots are a part
of Twitter. He's had bad experience with them before, and
now he's, you know, again, coming out and using the
body issue as a reason to maybe walk away from
the steal, or at least attempt to walk away from
the steal. So you know, I really think we're going
(27:54):
to be parson this for a while. But my gut
initial read here is that he's really trying to, you know,
set up his narrative for why he thinks Twitter is
responsible for this deal falling part and not him. And
obviously he's doing that because if he's the one who
walks away or makes this an issue, Twitter might be
able to sue him to try and force him to
complete the deal. Wagner, we thank you so much for
(28:16):
all the breaking news analysis, and Christal c as well
really jumping in the share and giving us such analysis
and nuance to what we are learning. Of course, that
is Elon Musk is looking to terminate the deal to
buy Twitter. Welcome back to Bloomberg Technology. Guess what breaking news.
Elon Musk, as many had predicted, has indeed started the
(28:37):
process of trying to terminate the deal to buy Twitter.
Here's a filed and amended thirt D and of course
is calling out phil failure to provide essential information, ignoring
of requests for information, in particular what he calls a
number of bots that he thinks of far in excess
of five percent. All of this has driven Twitter stopped
down after hours and moving some other shares as well.
(28:57):
kJ Greyfeld, I'm pleased to say still in the off
with us and a Coles Cosset report to You've been
looking at a lot of notes leading up to this
about probabilities whether this deal will get done. It's been
interesting to watch sort of the Wall Street community talk
about this deal, and Dan Ives from One Bush put
it on a note yesterday actually UH saying that there's
a sixty chance that this deal even gets sun. That
(29:19):
was yesterday, of course, fall following some Washington Post reporting.
They also suggested that there could be a thirty five
percent chance that must go loss away from the deal altogether,
which obviously has borne out now. And obviously the bots
question has been a big question regarding this deal. But
there's also the share price to consider. Of course. One
Musk had made this offer. It was at fifty four
(29:41):
dollars and twenty cents a deal, UH, and that had
been sort of floated in the analyst community that maybe
that price is just too lofty, maybe they'll negotiate it
down more. And you can see Twitter shares right now
trading around thirty four dollars fifty four cents, so that
premium that dis that between the two had grown and
(30:03):
obviously growing now and now the deal is terminated. And
I also want to ask you a bit about the
Tesla market reaction, one that you've pointed out on Twitter itself.
I don't agree as what we're using that social media
platform to brighten the knees, but remind us as to
why to Tesla might bounce on it. So the deal
here is that obviously Musk is the CEO of Tesla,
and so the bold case behind my you're probably seeing
(30:24):
the shares move higher, and after hours I see Tesla
shares up over one percent at the moment, higher than
when I tweeted this. Is that perhaps Musk will now
refocus his attention on Tesla, supposedly, you know, his main company,
but as we know, I mean, Musk has always been
sort of a part time CEO of Tesla. He obviously
has a lot of projects going on, including SpaceX. So
we'll see if this move holds when we actually get
(30:46):
into real trading on Monday. But interesting to see the
after hours reaction. You see the knee jerk move lower
and Twitter shares down over six percent. You look at
Tesla shares up moving up to one and a half
percent or so. Now, so that is the knee jerk
Katy Greifeldt. As always, we thank you for the knee
joke reactions, the ultimate reactions. Mobidus to say also ahead
of Wall Street Week, because I've very own David Weston,
(31:08):
of course, anchor of that show, anchor of of course
of the politics show for us as well, and also
a man who knows an awful about the law, and
this is going this is going to the courts, right.
The one clear winner in this that the lawyers. They're
gonna be a lot of lawyers charging a lot of
money and you're gonna pay a lot of billbill hours
as a result. I mean, I think there's so much
(31:28):
we don't know at this point. And we know that
now Elon Musk says he's not going to go forward
with the deal, we have to take him at his word.
At the same time, he has some legal obligations he
has to address. The Twitter board has been very steadfast
and saying we're holding you your deal, and you have
to ask, is he really getting out of it or
is this a negotiation? Is this a negotiation over the
one billion dollar big breakup? Fee or a lower price
(31:50):
is Katie just suggested for the company. Let's be honest,
he would not have offered forty four billion dollars a
month after we offered it. It was no longer a
sensible price. And he's saying, I'm not sure I wanted
at that price. We'll see, but I'll guarantee it. There's
a lot of legal action coming up. And of course, David,
it is the fiducial duty of the board to fight
for the highest possible price. It is also going to
(32:11):
be incredibly costly for the board of Twitter and indeed
Twitter's executive team to be paying these sort of legal
fees when we know it's up against the wealthiest man
in the world. Absolutely, and two other things that I
add to that. A number one, there is a fairness
opinion that was rendered by Goldman, Sachs and others saying
this is a fair price. It's aftuly hard for the
board to say, Okay, we have a fairness opinion saying
that price is the fair price. Now we're just gonna
(32:32):
give up on it. We're not going to pursue that
anymore at all. That's a tough thing to do, and
the board has a pretty good legal argument, I would think,
and they've been pretty steadfast. At the same time, I
suspect part of what's driving Mr Musk is the board
has shown very little willingness to negotiate with him. Uh
and this, as I say, and maybe he's really trying
to get out of It's also possible that that in
(32:53):
fact he's he's really trying to get a real negotiation
going on. And also, David, going back to how the
steel erupted, He's have it did this in in a
completely bombastic way. For many a lawyer that it felt
as though documents were put in too late, documents weren't
filled out in the normal way, and indeed it seemed
as though he waved his rights to due diligence. Well
he did, I think explicitly waves the rights and due diligence,
(33:15):
which which says something but I say bombastic and Elon
Musk is not necessarily contradictory. Right, It's not a total
surprise that would work. But I think from telling you
to people who know Elon Musk can have dealt with
him even during this time, I think there's a good
part of the almost that really did want to buy Twitter.
Maybe he still does want to buy Twitter. He generally
wants to buy this company, thinks he can do something
good with this company. So I don't think he was
(33:37):
just toying with it at all. I just think he's
definitely of two minds. Apparently, David Western, what would do
without your legal expertise? And indeed po a man who
is going to go on and talk about this a
little bit, and of course your show, which we will
want to be watching Wall Street Week Balance of Power
as well. Of course he can tune into David Western there.
But we thank also our own Kat Grayfield for the
market moves and the reactions. More for you terms of
(34:00):
analysis to the breaking news this Friday. Of course, you
know Mask backing away from that forty four billion dollar
deal for Twitter. This is Blomberg. The disastrous scenario has
occurred as according to Dan Ives as well, this of course,
a key analyst on all things Twitter, putting out a
(34:22):
note as we speak from web Bush, Dan, I've saying
that the termination that we've just learned Harv, you know,
Mask trying to terminate the four billion dollar deal for
Twitter is a disaster scenario for Twitter and it's board.
As now the company will battle Musk in an elongated
court battle to recoup the deal and or the breakup
fee of one billion dollars at minimum. To discuss us
a little bit more amid all of this analysis, I
(34:44):
want to bring in one Ed Ludlow, who has been
on the plane back from one some valley event where
absolutely everyone has been talking about this deal. You managed
to read the letter that the T and D. What
were people saying about this deal to you? Ed Ludlow?
You know all of the investors I was spoken to
do over the last few days have been bracing for this,
the idea that a termination was possible. We know about
(35:06):
the one billion dollar reverse termination fee for both parties
that you know, investors are bracing for an outcome where
we have a long protracted legal battle between Elon Musk
and Twitter's board. You look through the letter that Elon
Musk sent to Twitter chief legals forgetting you know, he's
pretty clear he made multiple attempts to request information about
(35:28):
how the scientific approach the Twitter's board was taking to
quantifying level of box on the platform. Right, this idea
that there's less from five defensive blots on the platform
in terms of the user base, there's been a longstanding
boiler plate the Twitter of used in regulatory filing for
many years. And so it's it's kind of weird and
surprising that this was an issue from Musk in the
(35:49):
first place, because you remember that eight or twenty when
he signed a deal he waived due diligence anyway, you know,
with with the news as it is breaking that he's terminated.
You know, everyone I've spoken to in some valley it
thinks that this is bad for Twitter as a disasters
don for it, because you know, they're already cutting costs.
They've been bracing for a recession in which they're going
(36:11):
to have the lower r and defending lower head count.
And market is looking okay globally, but it's not perfect.
And now they're going to have to go to court
and and and get this done. And it was only
yet to day carried. You remember that they reiterated they
intended to follow through with the terms of the original deal.
And yet here we are, me on a jet playing
you in the studio and Pelon must walking away from
(36:32):
the deal just remind us because he talks of not
enough information. He talks of multiple requests. I thought Twitter
had been delivering information regarding bots. So in the letter,
Elon Much's attorneys say that by Twitter's own admission in
the communications they've made in the end of the beginning
(36:55):
of May and through the June period, that the data
would incomplete. Twitter's argument they took be is that a
third party be a third party and stored by the
mask been a third party chosen cannot verify the level
of boxing the platform, the reason being the twitters methodology
for verification uses a mix of private data that they
hold as the platform operator m And you know, private
(37:18):
data is such that they're protecting the contemer and public
data and only Twitter has access to that. And that's
what the discussion is around how complete that data work. Yeah,
and remind us because Elon Musk is due to be fly.
I think he's already arrived, has he not, or is
at least due to arrive at some values, want to
be giving a speech tomorrow. And the key issue is
al and Co were then advisor on the deal. In
(37:40):
some way, this is this could be an amazing meeting
of all the top executives because I understand the CEO
and the CFO Twitter also at some value. Yeah, I'm
just going to say out loud, I wish I was
still in either or I wish I was with you
in the studio, because this is the most crazy story
of my career in lifetime. That al and Co. He's
(38:01):
an advisor on the Twitter side, okay, Hanlen and Co
is a long standing investment bank advisor for Twitter. And
then on the other side, they've invited Elon Musk in
the conference. No one saw Paragage Segal and Elon Musk
in the same space as you know. I asked med
Peogle and Paragagon Roll last night if they were worried
about Elon Musk walking your way. Twice they declined to
(38:23):
answer the question, and t four hours later he walked away.
So there we go. There we go, at Dudlow, We'll
let you go for a moment to thank you so
much for jumping on the phone with us, Ed Ludlow.
With the analysis, We've also got some expan analysis from
a senior analyst on Twitter of web Bush Securities, one
Dan Ice, who has a rating neutral on Twitter, who
has a price of thirty eight dollars seventy nine, and
(38:44):
it was a twelve month price target of forty three dollars.
But Dan ives, you've already put out a note. You're
a busy man. What do you make of this walk away?
I mean, for Twitter, it's a it's a namedayor scenario
because now it's a standalone company. Start could be twenty
five thirty hours on Monday and they feed just a
brutal core battle with Musk, and this has been it's
(39:04):
been a you know, a circus show in terms of
from the beginning it never made sense as to why
Musk going to buy it, But now the way it ends,
it's just it really ends. It puts them between a
rock and a hard place, and the street's gonna, you know,
really have a hard time with this. In terms of
Twitter basically being viewed as damaged goods, I'm really interested in.
(39:24):
And originally, as we were hearing when we talked to
David Western that you know, forty four billion dollars was
deemed fair value for overall Twitter. And as said, I
think my Goldman sacks, why do you have a fair
value price of thirty eight dollar seventy nine? What is it?
It was the underlying business model. How much has that
eroded since Elon Musk first put in his offer, well,
first off billion from the beginning never made chance and
(39:47):
that's why there was no other bidder within miles of it.
You know, we always to fair value for Twitter was
somewhere in an acquisition forty and now the fake account
bod issue, you will as that's really come to the forefront.
I think now this condition is the stock that's gonna
have a chew in front of it because of those metrics,
(40:10):
and also the markets changed so much sense to deal
whether it's Must get in cold feet and now it
really sends us onto a tail spin in terms of Twitter.
And I also think Must comes out with a black
eye in terms of how this was all handled. I
agree and many would agree, I think in terms of
like how something of news organizations view M and A offers.
(40:32):
But I'm interested in your take from a four billion
dollar price tag. What is it about the box? I
thought we sort of knew about the box and the
fact that what is it that from a Twitter perspective
could have been done better on that. Well, it's all
about what is it five? Or is it? And I
think even though the body issue has always been a
(40:53):
black cloud over Twitter's name, you know, even if you
go back over the years, now it comes down, that's
just how how big is that number? Because that's demodogation,
that's the metrics. Then on the other side, others will
argue Must just this is a scapegoat, it's cold feed.
He basically woke up one day decided not to do
it in typical must fashion. And now the knives will
(41:15):
be sharpened going into what's just going to be a
Game of Thrones core battle. We currently understand, of course,
and them and breaking news continues, but we do understand
that the Twitter board is committed to closing this transaction.
According to Brett Taylor, now the Twitter board is planning
legal action to enforce this agreement. Dan, how much the
money suck? Is that? Look? I think right now, I
(41:37):
mean Twitter is gonna officially come out with that stands
just deal. When the stocker's trainer at thirty eight bocks,
he was telling you twenty was never gonna happen. Now
the question is is there still some chance that there's
some renegotiation that happens. I think the will is too
much at this point. And now Monday, Twitter is gonna
(41:57):
be looking at the stock with the two in front
of the probably high twenties. And now this starts to
go into free fall. Tanys, we want to thank you
so much, Senior Alice. Over their web, Bush Security is
already putting out an on this deal. As we say,
the Twitter board is planning legal action to enforce this agreement.
This is coming from Brett Taylor, Here's the chairman of
Twitter's a busy man because it's also the co se here.
(42:20):
We know, of course the salesforce. But he is on
the board of Twitter, and he is saying, look, we're
gonna be fighting this. Tend to close the transaction at
fifty four dollars twenty a share price. They received a
notice of the purported termination from Musk, and they tend
to close this transaction. They're confident in the merger pact
for all of this, says Bloomberg in New York. Have
a good weekend.
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