Twitter collapsed when Elon Musk pulled out of the deal

FIFI PETERS: I went to Elon Musk’s Twitter page earlier today before the show started, about half an hour ago, and he’s posting something about the sleep and how to make sure you get a good night’s sleep. I’m not sure if he’ll end sleepless nights for himself before Twitter decides to take him to court to return his agreement to buy the company, or if Tesla and SpaceX CEO will always give advice to his next generation. more than 100 million followers about good sleep. i don’t know.

But we have Seleho Tsatsi, financial analyst at Anchor Capital on Market Update for more. Seleho, good to talk to you. It took a long time. What do you mean? Why is Musk tweeting about good sleep?

SELEHO TSATSI: Hello, Fifi. I think Elon usually tweets about things that aren’t related to what’s going on in his professional career, so I don’t think we can read much of that. Whether he’s going to lose a lot of sleep over this Twitter deal, I think time will tell, but it’s a legal and financial situation, of course.

FIFI PETERS: Before that, he posted a picture of American actor Chuck Norris, sitting alone in front of a chessboard, as if playing chess – then his hashtag was ‘Chuckmate’. He received many comments from some of his followers, just wondering what it meant. Many people were worried about his decision to leave the deal.

I know Anchor Capital is holding on to Twitter for its technology money, so talk to us about what Musk cut-and-change around his decision to buy Twitter is meant for you and your copy.

SELEHO TSATSI: We don’t stick to Twitter. We haven’t been stuck for a while, thanks.

FIFI PETERS: Yeah, right. I beg your pardon.

SELEHO TSATSI: We bought it before let’s call it a mini-crash we had in the tech parts. But speaking widely on Twitter in general, I think the interesting thing about this is that Elon said that Twitter didn’t give him enough information, or even the information he asked for. about how many bots are on the threshold. Twitter says less than 5% of their users are bots. It looks like Elon is trying to break the deal, or just pay a billion dollars in termination. It would be less than he would have to pay – perhaps R45 billion or R44 billion – if he had to go with the company.

FIFI PETERS: And even more so if he needs to introduce as many of the changes he wants, talk about instant verification for some people, and the ability to edit tweets and the like. But there’s an idea there, Seleho, that is – given the knowledge that Elon Musk has about the Twitter marketing mix, the ins and outs as it appears to be working. necessary. – he might abandon this and start something similar at a lower price. I’m wondering if you think that’s a very big idea or if it’s kind of possible.

SELEHO TSATSI:. It’s hard to say. Before he made the offer, I think he had a lot on his desk with Tesla, SpaceX and all the other things he works for, the friendly team. Seems to be a person who can multitask.

I think it’s very difficult to start these digital sites from the ground up. In the last couple of years, we have been able to count on one hand the number of beginners in that area who have excelled. TikTok is probably there. It’s hard to think of too many; it’s a hard place to get into. I really think of you [can] Doesn’t leave anything before Elon, but it’s a tough place to start from the ground up.

FIFI PETERS: So the word you made to him was that he wanted to go and pay a billion [dollars]and they are called shields, as it were – do you know the end, what is the end of the story?

SELEHO TSATSI: All things considered – I guess – I think Elon will see success or success if he has to pay the billion -dollar final. On July 8, after Elon said he was leaving the deal, a Twitter official complained that Twitter was planning to seek legal action to enforce the partnership agreement. The merger agreement provides that Twitter will be able to enforce the agreement to terminate or go away, given where the agreement was approved in April. Although the market was in turmoil, inflation has been on the rise ever since. And the price, which is $ 44/$ 45 billion in valuation, is better in my opinion for Twitter and its shareholders, so they will fight to enforce this deal.

FIFI PETERS: On Friday I read that after Musk announced he was calling to resign, Twitter shares had dropped by 5%. I read a report that the stock price rose another 8% before the market closed today, wiping about $ 2 billion from Twitter’s market value. I know you said you don’t have Twitter in your database on Anchor but given the re -pulling price, you’re tempted to buy, and you’re teaching our audience to watch these little things. pae?

SELEHO TSATSI: Just looking at it now, we can see that the price has dropped by about 9% today. I think the difficulty with comparing Twitter with other businesses in technology – or just in the online advertising space – is that the return of prices in the past is called 18 clicks. months or more. So while Twitter is down 22% for the year, it’s even more so, when you have organizations like Meta Platforms, the parent company, or Facebook that are more than half of this year. It’s a company that really has good cash flow, [having] established less than $ 40 billion in free cash flow last year with several major sites in each of their regions. And that is just one example.

So I think there are a lot of interesting services like – if not better – reviews than Twitter right now. In short, to answer your question, I am not. I think there are more interesting places to deposit money now.

FIFI PETERS: All right. That’s a tweet. [Laughing] Thank you very much, man. It was a very good catch. Let’s leave it there. Seleho Tsatsi is an analyst at Anchor Capital.

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