October 1, 2022

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

3 min read

Late past 7 days, Elon Musk backed out of his bid to obtain Twitter for $44 Billion, blaming the social media platform’s alleged deficiency of transparency regarding bots on the web page. 

Explained How Elon Musk's Twitter bid may have been a smokescreen to liquidate Tesla stocks

When Twitter is now preparing to sue Musk and assert the $1 Billion that was established in case possibly of the functions, Musk or Twitter backed out of the offer, there is a theory floating all-around that Musk may perhaps have just used this takeover bid as a ploy to liquidate some of the Tesla inventory he owns, without the need of leading to a important dip in its valuation. If that is in fact the circumstance, it would be the most intelligent business go of the century.

To put items into context, Elon Musk experienced usually planned to use some of his shares of Tesla to fund his purchase of Twitter, and he would use a sizeable bunch of his Tesla holdings to leverage other funding selections. Now, several finance industry experts and trade analysts are declaring that Musk by no means intended to obtain Twitter and that the entire workout was just a clever ploy to liquidate a compact part of his holdings.

Josh Wolfe, a co-founder of Lux Capital, tweeted on Friday, right after Elon made the announcement, declaring, “Entire issue was a clever ruse to Promote + LIQUIDATE $8.5 BILLION of TESLA Inventory (w/plausible excuse for executing it)” He also added, “Honestly believe he can ‘land rockets’ but can not correct ‘bots’?”

Wolfe also points out how Musk would be equipped to stroll away with in excess of $7 Billion, even if he pays Twitter the $1 Billion “breakup fee.”

Henry Blodget, founder and CEO of Insider, retweeted Wolfe, incorporating that Musk’s 10-12 months Tesla solutions had been about to expire, “so he experienced to promote them.”

“The Twitter bid did allow for him to do that with out his struggling with issues about why he was marketing. And he sold at an fantastic cost!” Blodget explained through tweet.

Musk experienced place the acquisition deal “quickly on keep” in May so his crew could examine the number of spam or bot accounts on the social media system. Twitter estimated that bots accounted for 5% or much less of end users and offered Musk with inner metrics. But Musk insisted his group hadn’t been furnished with more than enough details to independently examine the facts.

Ever considering the fact that Elon Musk declared that he was withdrawing his bid to purchase Twitter, Tesla’s inventory has risen by around 2 for every cent, while Twitter’s inventory fell by 5 for every cent.

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