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SAN FRANICSCO — Elon Musk may be targeting a lower price for Twitter, he said at a conference Monday, just days after tweeting that his $44 billion bid for the site was “temporarily on hold.”
In a closed session at the All-In Summit in Miami, a conference featuring technology founders and media personalities, Musk said a deal for Twitter at a lower price was not “out of the question.” The comments were first reported by Bloomberg.
Kevin Paffrath, a financial analyst and YouTuber who attended the conference by the name “Meet Kevin,” said Musk was asked if “at a different price point, it could be a rock solid deal.”
“I mean, it’s not out of the question,” he said, according to Paffrath, who took notes at the same time. “The more questions I ask, the more concerned I become.”
Musk did not immediately respond to a request for comment.
Musk’s comments Monday signaled that he continues to distance himself from his original $44 billion deal to buy the site, announced on April 25. The Tesla CEO has clashed with Twitter management over the problem of spam bots, fake accounts that often promote cryptocurrencies and peddle scams, although analysts and some advisors have suggested Musk’s focus on the problem is just an excuse to withdraw from the business.
Tesla stock has fallen sharply since Musk’s interest in Twitter broke, and Musk’s net worth has taken a significant hit as a result. Much of Musk’s funding of the deal relies on Musk’s ability to use Tesla stock as collateral, much like using real estate to secure a loan. Most recently, the downturn in tech stocks had prompted Musk to seek additional investors to reduce its equity exposure to the deal, as Musk had pledged $21 billion of his net worth — mostly tied up in Tesla stock — to buy the site.
Elon Musk says Twitter deal is on hold and puts bid on shaky ground
Shares of Twitter fell sharply after Musk’s comments, closing at $37.39 on Monday – well below Musk’s $54.20 per share bid. The deal was expected to be finalized later this year before Musk tweeted on Friday that it was on hold “pending on further details [Twitter’s] Calculating that spam/fake accounts actually make up less than 5% of users.”
Musk has indicated that he believes spam accounts make up a significantly larger percentage of Twitter users. On Monday, he responded with a poop emoji to a Twitter thread from the social media site’s CEO, Parag Agrawal, who was trying to explain his methodology for counting bots.
Twitter’s bot issue likely won’t put Musk in a position to back out of the deal
Musk had voiced his concerns about Twitter bots when prompted to potentially seek a lower price. He had likened the problem of buying a house to a termite problem. The house would be worth less if found to be mostly termites – compared to one that had only a minor termite problem, he said.
On the surface, Musk outlined his frustration at his inability to get what he took to be direct answers from Twitter.
For Paffrath, who was in the audience, it was clear that Musk was “laying the foundation or [had] started renegotiating.”
talk about a bot issue on Twitter @elonmusk says it might be like buying a house when they say it’s 5 percent termites, but you find out it’s actually 90 percent termites – says company hasn’t accommodated him #allinsummit pic.twitter.com/dQxhRnUMJq
— Josiah Daniel Ryan (@JosiahRyan) May 16, 2022
Now, with Musk’s comments at Monday’s tech conference, analysts signaled doubts about whether the deal would eventually go through.
“In our view, the Street puts the chance of Musk walking at more than 50%, which speaks to the pressure on Twitter stocks…$54.20 is out the window with this circus show,” Dan wrote Ives, an analyst at Wedbush Securities, in a note. “[We] Consider the $44 billion Twitter deal less than 50% [likelihood] getting ready starting today… If a revised deal is finalized by Musk and Twitter, it will likely be at a lower price.”
Meanwhile, Twitter released a new corporate filing late Monday, in which the company answered questions about whether there would be layoffs or whether its content moderation practices would change. But the document offered few answers other than saying the company’s practices would continue in the same way as before for the time being. The phrase “business as usual” is repeated nine times in the file.
Elizabeth Dwoskin contributed to this report.