Elon Musk says there are three main hurdles before he can buy Twitter.
Musk is interested in buying Twitter for $44 Billion. This huge acquisition will have profound implications for the industry of social media. It is no surprise, given the contentious views of SpaceX and Tesla CEOs on content moderation.
After Musk threatened to quit, the fate of the deal is uncertain. He could face a $1B termination fee or even lawsuits if he does not abide by the terms of the agreement.
Musk spoke Tuesday at a Bloomberg event and stated that there are some “unresolved problems” that must be resolved before he can move forward with the takeover.
1. Fake accounts
Musk expressed concern about the number of fake Twitter accounts.
Twitter revealed that less than 5 percent of accounts are spam or fake accounts. Musk stated Tuesday that this was not the case for most people’s experience with Twitter. “
He said, “We are still waiting on a resolution to this matter, and that it is an extremely important matter.”
Bret, the independent chair of Twitter’s board, stated last week that the company management was still committed to the transaction as per the terms.
2. Debt financing
According Musk, the second hurdle to the Twitter transaction will be the amount of debt required to finance it.
Musk made a May commitment to pay $33.5B cash to the company. Other investors, such as Larry Ellison, Oracle cofounder, and Binance cryptocurrency exchange Binance, have also made $7.1B equity financing commitments to Musk.
Musk claims that bank loans will provide the remainder of the financing. It is unclear how this will all work. Musk claims that the rest of the funding will come from bank loans.
3. Approval by shareholders
Musk must obtain shareholder approval to close the deal. Investors will vote on the deal in late July or early August.
It is not clear if Musk will get enough support to buy the company outright. Some Twitter shareholders sued Musk and the company for their chaotic handling the buyout process.
“Will the debt portion of the round be combined?” Musk claimed Tuesday that the debt portion of the round would be combined.
These, together with the issue of fake accounts, were “the three things that must be resolved before the transaction can be completed.”