Connect with us

Stock Markets

Musk puts $44 billion Twitter deal on hold over fake account data

Published

on


© Reuters. FILE PHOTO: Elon Musk’s Twitter profile is seen on a smartphone placed on printed Twitter logos in this picture illustration taken April 28, 2022. REUTERS/Dado Ruvic/Illustration

By Nivedita Balu and Kenneth Li

(Reuters) -Elon Musk tweeted on Friday that his $44-billion cash deal for Twitter Inc (NYSE:TWTR) is “temporarily on hold” while he waits for the social media company to provide data on the proportion of its fake accounts.

Twitter shares initially fell more than 20% in premarket trading, but after Tesla (NASDAQ:TSLA) CEO Musk sent a second tweet saying he remained committed to the deal they regained some ground. The stock was off 12% in heavy volume ahead of the market open as investors fretted over the takeover.

Musk, the world’s richest person, decided to waive due diligence when he agreed to buy Twitter on April 25, in an effort to get the San Francisco-based company to accept his “best and final offer” of $54.20 per share.

Since then, technology stocks have plunged amid investor concerns over inflation and a potential economic slowdown.

The spread between the offer price and the value of Twitter shares had widened in recent days, implying less than a 50% chance of completion, as investors speculated that the downturn would prompt Musk to walk or seek a lower price.

“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users,” Musk told his more than 92 million Twitter followers.

Spam or fake accounts are designed to manipulate or artificially boost activity on services like Twitter. Some are tied to improve commercial results, while others are designed to create an impression that something or someone is more popular.

Twitter did not immediately respond to a request for comment. There was no immediate reaction from the investors that Musk tapped last week to raise $7.1 billion in funding.

Musk tweeted a Reuters story from ten days ago that cited the fake account figures. Twitter has said that the figures were an estimate and that the actual number may be higher.

The estimated number of spam accounts on the microblogging site has held steady below 5% since 2013, according to regulatory filings from Twitter, prompting some analysts to question why Musk was raising it now.

“This 5% metric has been out for some time. He clearly would have already seen it… So it may well be more part of the strategy to lower the price,” said Susannah Streeter, an analyst at Hargreaves Lansdown (LON:HRGV).

Representatives for Musk did not immediately respond to requests for comment from Reuters.

Tesla’s stock, meanwhile, rose 7% in premarket trading. The shares have lost about a quarter of their value since Musk disclosed a stake in Twitter of April 4, amid concerns he will get distracted as Tesla’s chief executive and that he may have to sell more Tesla shares to fund the deal.

There is plenty of precedent for a potential renegotiation of the price following a market downturn. Several companies repriced agreed acquisitions when the COVID-19 pandemic broke out in 2020 and delivered a global economic shock.

In one instance, French retailer LVMH threatened to walk away from a deal with Tiffany & Co (NYSE:TIF). The U.S. jewelry retailer agreed to lower the price by $425 million to $15.8 billion.

Acquirers seeking a get out sometimes turn to “material adverse effect” clauses in their merger agreement, arguing the target company has been significantly damaged.

But the language in the Twitter deal agreement, as in many recent mergers, does not allow Musk to walk away because of a deteriorating business environment, such as a drop in demand for advertising or because Twitter’s shares have plunged.

Musk is contractually obligated to pay Twitter a $1 billion break-up fee if he does not complete the deal, and the language in the deal contract appears to cap any damages that Twitter can seek from Musk to that level.

But the contract also contains a “specific performance” clause that a judge can cite to force Musk to complete the deal.

In practice, acquirers who lose a specific performance case are almost never forced to complete an acquisition and typically negotiate a monetary settlement with their targets.

“The nature of Musk creating so much uncertainty in a tweet (and not a filing) is very troubling to us and the Street and now sends this whole deal into a circus show with many questions and no concrete answers as to the path of this deal going forward,” Wedbush analyst Daniel Ives wrote in a note.

DEFEAT THE BOTS

Musk has said that if he buys Twitter he “will defeat the spam bots or die trying” and has blamed the company’s reliance on advertising for why it has let spam bots proliferate.

He has also been critical of Twitter’s moderation policy and has said he wants Twitter’s algorithm to prioritize tweets to be public and was against too much power on the service to corporations that advertise.

Nevertheless, Musk is targeting advertising revenue to more than double by 2028, according to slides he presented to investors that were reported by the New York Times.

Ads are expected to make up about 45% of Twitter’s total revenue by that time, down from nearly all of its revenue today, according to the investor presentation.

Earlier this week, Musk said he would reverse Twitter’s ban on former U.S. President Donald Trump when he buys the social media platform, signaling his intention to cut moderation.

Stock Markets

Hyundai Motor Group to invest more than $10 billion in U.S. up to 2025

Published

on

3/3

© Reuters. Hyundai Motor Group Chairman Euisun Chung delivers remarks along with U.S. President Joe Biden on the automaker’s decision to build a new electric vehicle and battery manufacturing facility in Savannah, Georgia, as Biden ends his visit to Seoul, South K

2/3

By Heekyong Yang

SEOUL (Reuters) -Hyundai Motor Group said on Sunday it would invest an additional $5 billion in the United States by 2025 to strengthen collaboration with U.S. firms in advanced technology.

The investments, announced during a visit to Seoul by President Joe Biden, are for robotics, urban air mobility, autonomous driving and artificial intelligence, the group said.

Hyundai Motor Group, which houses Hyundai Motor Co and Kia Corp, on Friday announced plans to invest $5.5 billion in Georgia to build electric vehicle (EV) and battery facilities.

The new investment brings its planned U.S. total through 2025 to about $10 billion, above the $7.4 billion it announced last year.

The world’s third-biggest automaker by vehicles sales did not say where in the United States the additional $5 billion would be invested.

“Thanks to Hyundai, we are being part of this transformative automobile sector and accelerating us on a road where we’re going to be handing to United States of all electric future,” Biden told a news conference.

Standing next to him after a meeting, Hyundai Motor Group executive chair Euisun Chung said, “I am confident that this new plant in Georgia will help us become a leader in the America automobile industry with regards to building high quality electric vehicles for our U.S. customers.”

Hyundai’s new EV and battery manufacturing facilities will be based in the southern “right to work” state, where labour unions are less prevalent and cannot require workers to join.

Biden, a Democrat, has described himself as the most pro-union president in history. But the deal, announced by Georgia’s Republican governor, showed the compromises the president may have to make as he woos investment overseas.

Continue Reading

Stock Markets

Analysis-Tesla brand threatened by Musk harassment claim, criticism of Democrats

Published

on

3/3

© Reuters. FILE PHOTO: Tesla CEO Elon Musk speaks about new Autopilot features during a Tesla event in Palo Alto, California October 14, 2015. REUTERS/Beck Diefenbach

2/3

By Hyunjoo Jin and Paul Lienert

(Reuters) – Elon Musk has made a name for himself and Tesla (NASDAQ:TSLA) by breaking the rules, but the billionaire’s latest comments on politics and a claim of sexual harassment against him that he said is untrue may hurt the brand in the eyes of some car owners and employees.

Musk on Thursday denied a report by Business Insider that he sexually harassed a flight attendant on a private jet in 2016, calling the person who made the claim a liar.

The previous day, the Tesla chief executive, in the midst of a contentious effort to buy Twitter Inc (NYSE:TWTR), said he would now vote Republican instead of Democrat and called the Democrats a “party of division and hate.”

Tesla also was cut this week from the widely followed S&P 500 ESG Index, which an index executive said was due to issues including claims of racial discrimination within the company and crashes linked to its vehicles.

Musk responded by calling such ratings around environmental, social and governance (ESG) issues a “scam,” and questioned how the index could drop an electric car firm while adding oil and gas producers.

Tesla could not immediately be reached to comment.

While Musk has made attention-grabbing headlines before – once calling one critic a “pedo guy” on Twitter – the latest controversies again raise the question whether his outspokenness will tarnish his likeability. And – since Musk is so closely tied to Tesla – whether that will that hurt the carmaker’s sales, especially in California.

The left-leaning state is Tesla’s largest market, accounting for nearly 40% of the company’s U.S. retail registrations last year, according to Experian (OTC:EXPGF) data. Tesla sales in California were up almost 70% in the year and it had a 6.5% share of all vehicles in the state, according to the California New Car Dealers Association.

#BoycottTesla was trending on Twitter on Friday and several people claimed they were canceling their car orders.

“In the past, I admired him for working to build a green business that’s transformational in energy use. But he is sadly becoming divisive as an attention seeking troll and I no longer trust that he is dedicated to the quality of his products. I will cancel my Tesla order,” said J Yeh, a Twitter user who describes herself as a lawyer who has lived in several cities including Los Angeles.

“You lost a potential customer,” a Twitter user named Ute Bauer from Germany said, adding in German: “To anyone reading this, cancel your orders.”

Reuters was unable to confirm if any Tesla orders had been canceled.

Many institutional investors may stand by Musk no matter what given the company’s strong performance, but that doesn’t mean some aren’t frustrated.

“They’re doing a lot of good things,” said Taylor Ogan, CEO of Snow Bull Capital, which owns Tesla shares. “It’s just disappointing when that is tainted by Elon Musk’s antics. Elon Musk is the best thing for Tesla and the worst thing for Tesla.”

One Tesla employee, who asked not to be identified, voiced frustration that Musk’s efforts outside Tesla appeared to be hurting the carmaker’s stock. “The company needs to do something to address the issue,” he said.

On Friday, Tesla shares dropped almost 9%, knocking about $66 billion off of Tesla’s stock market value and putting the stock at its lowest level since last August, with analysts citing “distraction risks” from the Twitter deal. Musk assured people on Thursday Tesla was constantly on his mind.

If discussion around water coolers at work focused on the sexual harassment claim against Musk rather than Tesla products, the end result could be “corrosive” for the Tesla brand, said John Smith, a former group vice president at GM who ran global product planning.

Tesla and SpaceX employees also could become “a little bit rattled and angry” because of Musk’s anti-Democratic party comments as technology company staff in California tend to be more liberal, said Jason Stomel, founder of tech talent agency Cadre.

Bill Nelson, administrator of NASA, which relies on Musk’s SpaceX to fly its astronauts to space, told Reuters on Thursday that Musk has a strong team of executives at the spacecraft maker and the agency’s partnership with the company was “going without a hitch.”

And Musk still has plenty of fans online. Twitter user @JVega103 said he was a Republican who owned a Tesla and just signed up for Tesla solar panels. “Thanks for everything you do,” the user tweeted.

That left some industry observers wondering whether Musk and Tesla would simply shake off these latest controversies, as they have in the past.

“Is Elon Musk now crazy, or crazy like a fox? He has earned the benefit of the doubt as he is often playing chess when the rest of us are playing checkers,” Northwestern (NASDAQ:NWE) University professor Erik Qualman said. “As Musk himself on ‘Saturday Night Live’ famously stated, ‘What, did you think I would be normal?'”

Continue Reading

Stock Markets

Hyundai Motor Group to invest $5 billion in U.S. up to 2025

Published

on

3/3

© Reuters. Hyundai Motor Group Chairman Euisun Chung delivers remarks along with U.S. President Joe Biden on the automaker’s decision to build a new electric vehicle and battery manufacturing facility in Savannah, Georgia, as Biden ends his visit to Seoul, South K

2/3

By Heekyong Yang

SEOUL (Reuters) -Hyundai Motor Group said on Sunday it would invest an additional $5 billion in the United States by 2025 to strengthen collaboration with U.S. firms in advanced technology.

The investments, announced during a visit to Seoul by President Joe Biden, are for robotics, urban air mobility, autonomous driving and artificial intelligence, the group said.

Hyundai Motor Group, which houses Hyundai Motor Co and Kia Corp, on Friday announced plans to invest $5.5 billion in Georgia to build electric vehicle (EV) and battery facilities.

The new investment brings its planned U.S. total through 2025 to about $10 billion, above the $7.4 billion it announced last year.

The world’s third-biggest automaker by vehicles sales did not say where in the United States the additional $5 billion would be invested.

“Thanks to Hyundai, we are being part of this transformative automobile sector and accelerating us on a road where we’re going to be handing to United States of all electric future,” Biden told a news conference.

Standing next to him after a meeting, Hyundai Motor Group executive chair Euisun Chung said, “I am confident that this new plant in Georgia will help us become a leader in the America automobile industry with regards to building high quality electric vehicles for our U.S. customers.”

Hyundai’s new EV and battery manufacturing facilities will be based in the southern “right to work” state, where labour unions are less prevalent and cannot require workers to join.

Biden, a Democrat, has described himself as the most pro-union president in history. But the deal, announced by Georgia’s Republican governor, showed the compromises the president may have to make as he woos investment overseas.

Continue Reading

News

Cryptocurrency7 hours ago

Technical Analysis Suggests That DOGE Price Will Fall In Next 24H

© Reuters. Technical Analysis Suggests That DOGE Price Will Fall In Next 24H The number 10 place on CoinMarketCap’s list...

Economy7 hours ago

As bear market looms, battered Wall St seeks elusive ‘Fed put’

© Reuters. FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City,...

Commodities7 hours ago

Kyiv rules out ceasefire as Russia steps up offensive in Ukraine’s east

6/6 © Reuters. A local resident walks by a destroyed building after a rocket attack on a university campus, amid...

World9 hours ago

Analysis-Australian women unleash new political force on climate, integrity

3/3 © Reuters. FILE PHOTO: Voters line up outside a Marrickville suburb polling station to cast their ballots on the...

World10 hours ago

In Japan, Biden to launch economic plan for region sceptical on benefits

3/3 © Reuters. U.S. President Joe Biden delivers remarks with Hyundai Motor Group Chairman Euisun Chung (not pictured) on the...

World10 hours ago

Biden says ‘everybody’ should be concerned about monkeypox outbreak

© Reuters. FILE PHOTO: U.S. President Joe Biden pauses while speaking during a briefing from senior officials on efforts to...

Coronavirus12 hours ago

Shanghai reopens some public transport, still on high COVID alert

3/3 © Reuters. A staff member in a protective suit stands on a platform of a subway station, on the...

Stock Markets13 hours ago

Hyundai Motor Group to invest more than $10 billion in U.S. up to 2025

3/3 © Reuters. Hyundai Motor Group Chairman Euisun Chung delivers remarks along with U.S. President Joe Biden on the automaker’s...

Cryptocurrency13 hours ago

The truth behind the misconceptions holding liquid staking back

The truth behind the misconceptions holding liquid staking back Blockchains have relied on proof-of-work (PoW) validation since their inception. Yet...

World13 hours ago

Australia’s Labor to retake power after 9 years, independents may hold sway

3/3 © Reuters. FILE PHOTO: Anthony Albanese, leader of Australia’s Labor Party, addresses supporters after incumbent Prime Minister and Liberal...

Stock Markets13 hours ago

Analysis-Tesla brand threatened by Musk harassment claim, criticism of Democrats

3/3 © Reuters. FILE PHOTO: Tesla CEO Elon Musk speaks about new Autopilot features during a Tesla event in Palo...

Stock Markets13 hours ago

Hyundai Motor Group to invest $5 billion in U.S. up to 2025

3/3 © Reuters. Hyundai Motor Group Chairman Euisun Chung delivers remarks along with U.S. President Joe Biden on the automaker’s...

Commodities13 hours ago

Ukraine rules out ceasefire as fighting intensifies in Donbas

5/5 © Reuters. A local resident walks by a destroyed building after a rocket attack on a university campus, amid...

World13 hours ago

Biden says ‘hello’ to N.Korea’s Kim amid tensions over weapons tests

3/3 © Reuters. FILE PHOTO: North Korean leader Kim Jong Un speaks at a politburo meeting of the Worker’s Party...

Cryptocurrency16 hours ago

Florida Rep. Donalds introduces Financial Freedom Act companion bill in the House

Florida Rep. Donalds introduces Financial Freedom Act companion bill in the House Rep. Byron Donalds, a Florida Republican, introduced the...

Cryptocurrency16 hours ago

FCA will ‘absolutely’ consider recent stablecoin depegging when drafting crypto rules: Report

FCA will ‘absolutely’ consider recent stablecoin depegging when drafting crypto rules: Report Sarah Pritchard, the executive director of markets at...

Cryptocurrency17 hours ago

Finance Redefined: Lifeline for Terra projects, proposed Terra hard fork and more

Finance Redefined: Lifeline for Terra projects, proposed Terra hard fork and more The past week in the decentralized finance (DeFi)...

Cryptocurrency17 hours ago

MSP Recovery joins forces with Tokenology to release tokenized healthcare initiative

MSP Recovery joins forces with Tokenology to release tokenized healthcare initiative MSP Recovery LLC, a healthcare recovery firm based in...

Coronavirus17 hours ago

WHO expects more cases of monkeypox to emerge globally

© Reuters. FILE PHOTO: A section of skin tissue, harvested from a lesion on the skin of a monkey, that...

Cryptocurrency17 hours ago

3 red flags that signal a crypto project may be misleading investors

3 red flags that signal a crypto project may be misleading investors Satoshi Nakamoto left a large pair of shoes...

World17 hours ago

As Russia intensifies push for Donbas, Ukraine rules out ceasefire

5/5 © Reuters. A bus carrying service members of the Ukrainian armed forces, who surrendered at the besieged Azovstal steel...

Cryptocurrency17 hours ago

20% drop in the S&P 500 puts stocks in a bear market, Bitcoin and altcoins follow

20% drop in the S&P 500 puts stocks in a bear market, Bitcoin and altcoins follow Whoever coined the phrase...

Cryptocurrency17 hours ago

Do Kwon faces legal trouble in South Korea, China remains Bitcoin mining powerhouse, and Ethereum 2.0 eyes ‘huge testing milestone’: Hodler’s Digest, May 15-21

Do Kwon faces legal trouble in South Korea, China remains Bitcoin mining powerhouse, and Ethereum 2.0 eyes ‘huge testing milestone’:...

Cryptocurrency17 hours ago

OpenSea launches ‘Seaport’ ​​marketplace protocol allowing NFT bartering

OpenSea launches ‘Seaport’ ​​marketplace protocol allowing NFT bartering Nonfungible token marketplace OpenSea has announced the launch of a Web3 marketplace...

Cryptocurrency19 hours ago

Crypto gaming and the monkey run: How we should build the future of GameFi

Crypto gaming and the monkey run: How we should build the future of GameFi You’ve seen it before. An amazingly...

Cryptocurrency19 hours ago

Altcoin prices briefly rebounded, but derivatives metrics predict worsening conditions

Altcoin prices briefly rebounded, but derivatives metrics predict worsening conditions On May 12, the total crypto market capitalization reached its...

Cryptocurrency19 hours ago

3K+ Bit Digital hosting partner’s crypto miners go offline after explosion and fire

3K+ Bit Digital hosting partner’s crypto miners go offline after explosion and fire New York-headquartered crypto mining firm Bit Digital...

Stock Markets19 hours ago

Siemens Energy launches $4.3 billion bid for remaining Siemens Gamesa stake

© Reuters. FILE PHOTO: A model of a wind turbine with the Siemens Gamesa logo is displayed outside the annual...

Cryptocurrency20 hours ago

Price analysis 5/20: BTC, ETH, BNB, XRP, ADA, SOL, DOGE, DOT, AVAX, SHIB

Price analysis 5/20: BTC, ETH, BNB, XRP, ADA, SOL, DOGE, DOT, AVAX, SHIB Bitcoin’s (BTC) tight correlation with the legacy...

World20 hours ago

New York judge approves congressional map, throwing Democrats into disarray

© Reuters. FILE PHOTO: People fill out ballots during voting in the New York primary election at a polling site...

Trending