Elon Musk appears to be “looking for a scapegoat” on Twitter, analysts say

Tesla (TSLA) CEO Elon Musk says the deal to buy Twitter (TWTR) for the number of bots and fake accounts on the platform is stuck. But some analysts believe the billionaire is just looking for a scapegoat so he can move away from the 44 44 billion deal or negotiate a lower price.

“Elon Musk’s recent comments suggest he’s trying to negotiate a lower offer price,” Jefferies equity analyst Brent Thiel said. “Looking for a scapegoat; lower bid to come?” Wrote in a note to the title.

“We believe that Mask is using his investigation into% of fake TWTR accounts as an excuse to pay below $ 54.20 / share. In fact, the NASDAQ COMP is down 25% [year to date] And Elon Musk understands that he is paying extra for the assets, “the analyst wrote.

File - Elon Musk attends the opening ceremony of the Benefit Gala celebration at the Metropolitan Museum of Art's Costume Institute

Elon Musk attends the Benefit Gala at the Metropolitan Museum of the Arts Costume Institute Benefit Gala on Monday, May 2, 2022 at the opening ceremony of the exhibition “In America: An Anthology of Fashion” in New York. (Ivan Agostini / Invision / AP, file photo)

Wadebush Securities analyst Dan Ives was similarly skeptical of Musk’s claim in a note to clients: The Twitter deal has forced the mask to get “cold feet” and is not a new issue and could be a scapegoat for the low price. “

After adding its stake in the company, Musk offered to buy the social media company in April for 54.20 a share. As of May 17, the stock is currently trading at around $ 38 per share.

When Kasturi raises doubts about the buyout Tweet The agreement on Friday “supports pending accounting details that spam / fake accounts actually represent less than 5% of users.” The next day, Musk Retweeted That he is “still committed” to the acquisition.

“At the end of the day, the bot problem was known to cab drivers in New York City, and it seems to us that ‘the dog ate homework’ is an excuse to talk on bail or at a lower price in a Twitter deal,” Ives said. “The soap opera will continue this week, and will keep popcorn in hand because there are likely to be many more twists and turns in this Twitter / Mask story.”

Twitter spam

The development follows Musk’s remarks at the All-In-Summit in Miami, where he said a deal for a low-cost Twitter would not be “out of the question.”

A. Tuesday tweet“20% of fake / spam accounts can be 4 times * more than what Twitter claims. My offer was based on Twitter’s SEC filing being accurate,” Musk said.

According to Thill, Mask’s assumptions about spam and fake accounts will make his goals even more unreliable.

“We are already skeptical of Musk’s goal of reporting 600M and 931M mDAUs. [monetizable daily active users] Between 2025 and 2028, respectively, “Thill said.” Now that Musk believes that 80% of TWTR’s current 229M mDAUs are over 80% of the population, it’s hard to believe that the company will be able to achieve its long-term goals. “

Twitter CEO Parag Agarwal has pushed behind the mask claim in a post Long thread Details on how the company calculates its bot on Twitter. Agarwal said he “shared an overview of the speculation process with Elon a week ago” – to which Musk replied Pop emoji.

Despite the growing rift between Agarwal and Mask, both sides are moving forward with the deal. Twitter’s board unanimously recommended that shareholders approve Mask’s offer, which the social media company would personally accept, Bloomberg reported. And on Friday, Brett Taylor, chairman of Twitter, Tweet: “We are committed to our agreement.”

But if the deal fails, it could be a disaster for Twitter stock.

Thiel speculates that the stock could fall to $ 22 in a no-deal situation, while Ives writes that “the chances of a deal ending are not looking good now and it will probably walk 60% + chances from our point of view to the end of the mask. From the deal and the breakup.” Pays the fee. “

Dani Romero is a reporter for Yahoo Finance. Follow him on Twitter: anidaniromerotv

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